UK Regulatory Pressure to Contact Customers Increases

In recent weeks, UK government and financial services organisations have received increasing political and regulatory pressure to make greater efforts to proactively notify policy holders and account owners of their rights and savings information. To avoid the threat of regulatory fines, organisations have quickly prioritised data quality initiatives to the top of the list but in reality, the benefits of data suppression and enhancement go far beyond avoiding fines and in fact will make for stronger business models, more trustworthy brands and better customer service.

What’s New

A report in July by the House of Commons Public Accounts Committee quoted Treasury estimates that from 200,000 to 236,000 victims of the collapse of Equitable Life may miss out on compensation payments because it may not be able to trace between 17%-20% of policyholders by that date. The committee urged the Treasury to take urgent action to track down as many former policyholders of the failed insurer as possible (many of whom are elderly) before the March 2014 deadline. Payments totalling £370 million are due to be made by that date.

More recently still, there has been discussion of the huge number of interest rate reductions affecting savers without them being notified – banks and building societies last month announced a further 120 cuts to rates on savings accounts, some as high as 0.5%, on top of 750 made to existing easy access accounts this year. According to the Daily Telegraph, “around 17 million households are believed to have cash in an easy access account”.  While savings providers are able to make cuts of up to 0.25% without notifying customers, a spokesman for the regulator, the Financial Conduct Authority (FCA), told The Telegraph that “it is keeping a close eye on the activity of banks as the blizzard of rate reductions continues.”

Case in Point

To avoid the risk of potentially massive future penalties, a variety of organisations have taken up the challenge of contacting large numbers of customers, to provide the requisite communication. In fact, a financial services organisation which was recently advised by the FCA to make reasonable efforts to contact all its customers, retained a helpIT client to run a suppression job which netted significant savings: of the initial mailing file consisting of over seven million customers, half a million new addresses were supplied, half a million gone aways were removed and over 200 thousand deceased names suppressed. In this instance, the actual and potential savings for the organisation were enormous and went well beyond the cost of non-compliance – to say nothing of the savings to brand reputation in the eyes of new occupants and relatives of the deceased.

Easy Options

Fortunately, the right software makes it easy to compare customer data to an assortment of third party suppression files in different formats, keyed according to different standards. In fact, huge savings can be achieved by employing standard “gone away” and suppression screening, as well increasing the success rate in contacting old customers by finding their new addresses. While there used to be only a couple of broad coverage “gone away” files, these days there is a wealth of data available to mailers to enable them to reach their customers, going far beyond Royal Mail’s NCOA (National Change of Address) and Experian’s Absolute Movers lists. This “new address” data is in many cases pooled by financial services companies via reference agencies such as Equifax (in the reConnect file) and by property agencies via firms such as Wilmington Millennium (Smartlink). Similarly, deceased data is now much more comprehensive and more readily available than ever before.

New address, gone away and deceased data is also easy to access, either as a web-based service or downloaded onto the organisation’s own servers. Costs have come down with competition, so it’s certainly cheaper now to run gone away and deceased suppression than it is to print and mail letters to the “disappeared”.

Although it is never going to be 100%, data and software tools do exist to make it easy for the organisation to take reasonable steps to cost-effectively fulfil their obligations, even on names that might be considered low value, that an organisation might ordinarily have forgotten about.

Bottom Line

These numbers should give pause for thought to organisations of any type that are tempted to “spray and pray” or decide to keep silent about something their customers would really like to know about, regardless of regulation. What’s more, the value to the business, the customers and the brand goes far beyond the regulations with which they need to comply.

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