There’s been a lot of activity recently linked to the new Senior Managers & Certification Regime (SM&CR).
The last few months have seen an avalanche of work for compliance and HR consultants involving preparatory work and training. All of it has been necessary but in this deluge it’s easy to forget that the objective of SM&CR, according to the Financial Conduct Authority (FCA), is to instil a “healthy, customer-centric culture at the heart of every firm”.
I hear a lot of businesses talking about their customers being at the heart of what they do, but how often is this actually the case and do their customers feel the same?
Most businesses recognise that customer experience is key to their profitability through both retaining existing clients and attracting new ones. What a lot of firms and businesses may not realise is that customer experience is also a key feature of the SM&CR.
The SM&CR is made up of five conduct rules. The fourth conduct rule states: “You must pay due regard to the interests of customers and treat them fairly.”
Under the new regime for Senior Managers it will be critical not only to understand how it really feels to be a customer of their firm but also to have an audit trail to demonstrate the steps taken to gain this understanding.
I wonder how many businesses and senior managers are confident that they consistently deliver excellent service, in line with regulatory requirements – and have the evidence to prove it?
Experience v reality
Statistics from over ten years of Investor in Customers (IIC) assessments reveal that over 70% of employees rate the customer experience and service they provide higher than their customers do. When we dig a little further, we find that senior managers display the biggest gap between reality and their own assumptions.
A recent survey undertaken by IIC of some attendees at this year’s annual PIMFA conference suggests that one in four businesses don’t carry out any regular assessment of how they are meeting their customer needs.
This will need to change if firms and their senior managers are to be confident that they are meeting the key objective of SM&CR stated above. It will no longer be sufficient to work on the principle ‘you can’t fix what you don’t know is broken’.
From 9 December 2019, senior managers will be required to not only understand their customers’ needs and interests, but make sure they are meeting them too.
So, what do senior managers need to do?
Carrying out a detailed independent customer experience assessment will provide senior managers with a real understanding of their customers’ experience measured across a range of principles and attributes of customer service.
Not only will this establish current customer experience performance levels, but it will also identify the key areas of risk and of weakness where improvement is needed. An independent assessment with a full report is the first step for senior managers in demonstrating that their firm really does take its new obligations under SM&CR seriously.
IIC sets the standard for UK customer experience, providing awards and customer truths that help improve customer experience for all. Using verified methodology, they get feedback from customers, employees and management teams and provide a detailed feedback presentation and report with actionable results to help move businesses forward.
Staff may well understand what’s important for customers but from 9 December, when the SM&CR came in to force, businesses need to put in place the methodology and processes to evidence this.
This should not just be a tick box exercise. The results, if used and acted upon properly, should provide firms and businesses with the opportunity to drive growth.
By showing your customers that you care, and your staff that you are not just paying lip service to SM&CR, businesses have a real opportunity to gain a competitive advantage.
John Moret is chairman of Investor in Customers