Customers at the heart of compliance
At its essence, the best interests duty is about driving better customer outcomes. While the immediate reaction may be to see this as a regulatory demand that will require strong compliance layers, this only gets you halfway.
Best interests duty as a strategic opportunity
Compliance has rarely been considered a strategic function. It has typically operated in isolation, tasked with preventing negative incidents occurring, with a core focus on defining rules and frameworks to meet the requirements of regulations and laws.
There is a need to move away from this status quo – in which compliance comes first – towards a world that is outward-looking and focused on delivering comprehensive, exceptional customer outcomes. I’m not talking about reducing the significance of compliance; it’s about changing what we can achieve in a world in which regulation will evolve at a faster pace.
Ultimately, it will be critical to enable brokers to succeed in this new world by delivering the right technology and processes that can save time, keep them safe from risk, and help them find and keep clients and build their businesses.
Focus on the customer and the rest will follow
The common error when attempting to meet these new regulatory requirements is to focus on control and risk, avoiding potential financial and reputational damage. However, in today’s competitive environment, the customer experience cannot be sidelined.
There is now a need to work collaboratively where, as an example, regulatory forums blend with design and technology sessions.
There is now a need to work collaboratively where, as an example, regulatory forums blend with design and technology sessions
Compliance by design
Compliance, like most functions, needs to be rethought and disrupted. We need to get back to its intent: ensuring we service customers within boundaries that set long-term sustainable outcomes for both the client and the broader environment. And to do so, we need to adopt a ‘first principles’ strategic approach to compliance.
Banks have multiple legacy systems and fractured views of their clients, which makes delivering on a strategic outlook incredibly difficult. But for smaller, more agile organisations like aggregators and brokers, this can be achieved by aligning these changes with new digital solutions.
Technology as an enabler
The future isn’t simply digital, but digitally assisted. As an example, utilising AI and ranking algorithms to support product recommendations will become increasingly critical. Yet, simultaneously, the need for human interaction will remain. In this instance, AI will become the enabler, with brokers earning back time to focus on the customer experience instead of being distracted by manual or quantitative tasks.
Policies and processes will change; principles won’t
This new era of principles-based regulation will require an evolution of the compliance function. We’re entering an era of increased focus on ethics, culture and principles that will enable change and simultaneously become a source of competitive advantage.
Broker support and engagement
Finally, in this new world, broker support and engagement will be more critical than ever.
At Loan Market, we have four key focus areas: to keep our brokers safe, save them time, help them grow their businesses, and help them find and keep clients.
Having been across the country to talk to our broker partners, I am more confident than ever that the ‘Loan Market Way’ – integrated into our award-winning technology platform MyCRM – will ensure that our brokers are acting in customers’ best interests, while also supporting them in building successful businesses.
Rather than seeing the best interests duty as something to fear, I’m excited to work with our brokers to further prove why customers continue to choose us – because we work for them, always have and always will.