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Mortgage Arrears Thematic Review
Lessons Learned
What should we learn from this?
• Methodology of a Thematic Review provides excellent framework for self diagnostic
• May provide insight into preparation for the FCA Authorisation process
• Unsecured Arrears Thematic Review scheduled for Q1 2016
• The key findings are equally applicable to Unsecured
• Continual improvement programme is key to managing conduct risk profile
Methodology of previous Thematic Reviews
InformationRequest
Case StudyReviews
On SiteVisit
Follow Up& Actions
• Structure Charts• Policies• Segmentation• Forbearance Options• Strategies• Operational Procedures• Outsourcing & SLAs• MI• Key Documentation• Audit & Compliance
• Randomised Selection• Lifecycle Reviews• Outcome Testing• Individual Remediation• Route Cause
• Interviews• Observation• Discussion of Cases• Queries from Info Req
• Personalised findings• Action Plans• Industry Findings
Mortgage Arrears Thematic – The good news….
https://www.fca.org.uk/static/documents/thematic-reviews/tr14-03.pdf
Mortgage Arrears Thematic – And… The “not so good”….
https://www.fca.org.uk/static/documents/thematic-reviews/tr14-03.pdf
“Culture”
“Pro-active”
“Flexibility”“Vulnerability”
“Skills & Knowledge”
“Governance Arrangements”
“Inflexible Process & Systems”
What could go wrong?
Quality Assurance
MI focussed on £
Incentive schemes
Commercial structures
Supplier oversight
Governance
Management awareness
Recruitment
Skills & Training
Redress & Remediation
Operational SLAs & Tgts
Vulnerability
Do you have a clear definition of “detriment” and how to define a “good outcome”?
Complaints Management Policies (& Exceptions)
Diagnostic Tools – you all have what you need!
• FCA publications• Your front line staff• Your Compliance & Internal
Audit functions
• Top down – “Systems engineering”• Bottom up – “e2e risk assessment”• Potential detriment mapping
(measures / controls)
Culture is a bigger word than it looks
• It’s easy to start at the bottom…
• Fixing the burning issues…
• Setting up your QA frameworks…
• But if the culture from the top isn’t right...
What is a “culture” anyway?• A pattern of shared beliefs, practices, attitudes and conventions
• Integrated behaviours dependent upon capacity for learning and transmitting knowledge to succeeding generations
• Customary beliefs of a social group, and characteristic features of everyday existence shared by people
• But if the culture from the top isn’t right…..
Define it
Teach it
Live it
Measure it
Reward it
How to build it
The Role of Quality Assurance… And Controls…
What does good look like?Call opening
Fact finding
Assessing circumstances
Solutions planning
Agreeing next steps
Call closing
Continuous Improvement
Self assessment
Line 2 / Line 3
FCA / LSB
Case Reviews
Complaints & QAAc
tion
Plan
Governance
Owners
KPIs
Controls
Performance Contracts
Communication
Testing
Good conduct management may be a programme or a senior management role in its own right
Stating the obvious – the 5 C’s of Collections
Customer Affordability
Conduct
Customer
Cost
Commercials
Where next? Lots of you are already going there…
Self service budget plannersInteractive SMS / Live Chat / Web Chat
Payment PortalsTransfer of Information
Where next? But there’s room to take it further…
• Good tools & good data• Better view of affordability• Shorter phone calls• Easier for customer• Reduced costs• More appropriate solutions• Better outcomes
Stating the obvious – the 5 C’s of Collections
Conduct
Customer
Cost
CommercialsCustomer
Affordability