The Importance of Being Compliant


“Changing the way an institution manages customer complaints requires real action. A considerable first step is realising that satisfying customers and satisfying regulators are not two mutually exclusive propositions.” – Deloitte[1]

Imagine if the title of Oscar Wilde’s famous play had the word ‘Compliant’ instead of ‘Earnest’. It gives it a different ring tone, doesn’t it?

That’s because the word itself is rather insipid. Willing to do what other people want you to do and obeying particular rules or laws is hardly the stuff that elevates one’s interest levels. 

On the other hand, ‘Earnest’ – resulting from sincere and intense conviction – is a strong word that Wilde used because it reflected the overarching societal value in Victorian times.

Yet in the Australian Financial Services (AFS) Industry, abiding by the rules and regulations and “being compliant” is like currency, so the less vigorous meaning of ‘Compliant’ is at odds with its importance.

The compliance function is not just about topics like insider trading, anti-money laundering and internal policing. It’s much more than that. Compliance is a firm’s ticket to play and stay in the game.

In the absence of compliance, AFS firms invite reputational damage. Customers are unlikely to work with you if you lack trust in the marketplace. But if you are trusted, customers will give you the benefit of the doubt.

“It takes many good deeds to build a good reputation, and only one bad one to lose it” – Benjamin Franklin.

Unlike the infamous play, there’s nothing trivial or comedic about the subject matter. Indeed, there are significant challenges in complying with the many new rules and regulations that seem to be constantly streamed to AFS firms.

In my last blog, I reviewed a new one, ASIC’s RG 271 – Internal Dispute Resolution, including the massive increase in the potential costs and implications of breaching it. It comes into effect pretty soon, so the clock is ticking.

“Leading complaints management practices can help improve customer service, strengthen underlying compliance controls and avoid the growing potential for regulatory fines or damage to an institution’s reputation”. – Deloitte Center for Regulatory Strategies

Well said, Deloitte, but tighter regulation is also an opportunity for firms to test new ways of thinking and create adequate set-ups.

I recall studying win-win negotiation techniques for the first time. It was transformational for me because it brought to light all the rookie errors I’d made in my past significant negotiations. I suspect that RG 271 will bring on similar “ah-ha” moments as AFS firms prepare to meet their new obligations.

The transformation will come about in some meaningful ways:

  • Mindset. We are shifting the perspective away from viewing complaints as being negative. We instead consider it as ‘feedback’ (a good thing, right?) as well as an opportunity to garner data to identify trends and potentially drive positive change.
  • Early. The earlier the intake and the quality of the intake capabilities, the better. To get in before things become entrenched and to detect and mitigate the legal (i.e. regulatory action) and reputation risks.
  • Response. Moving from the typical ad-hoc response patterns to a more proactive complaints management approach will help fuel a core part of the CX – the Customer Experience.
  • Value. Recognise the ‘goldmine’ that complaints data can represent by appreciating its value, assigning a business value to it, and developing a robust body of complaint data.

Compliance is so much more than obeying the rules. Getting back to the earlier metaphor, it’s a currency of exchange between a firm and its customers. Trust reserves are built over time and can grow if there’s a positive feedback loop:

  • Repeated interactions;
  • Honest and fair communications; and
  • Follow-through on commitments.

The last two steps require the adoption of reliable rules around the communication exchange. ASIC has up-scaled its expectations on what this looks like concerning ‘expressions of dissatisfaction (aka complaints) in the AFS industry.

It requires high-quality complaints intake capabilities, but there’s no need to sound the battle stations yet. Guided Resolution has you covered. We’ve purpose-built a tech platform (Guided Compliance) to help prevent unforced errors in complaints handling. Its capabilities underwrite compliance as well as a positive customer experience that meets the needs of today’s always-on digital culture:

  • Self-guided
  • Self-paced
  • Available 24/7
  • Easy to use
  • Unassuming

It embeds all the bells and whistles (management reports, reduce handling times, safe and secure), with the icing on the cake – a self-serve guided mediation tool for easy escalation – included in the platform.

There are no lock-in contracts, so AFS firms can meet the new compliance obligations coming their way at a fraction of the cost of ramping up with physical infrastructure.

[1] ‘The power of complaints – Unlocking the value of customer dissatisfaction’ Deloitte Center for Regulatory Strategies (2015)