The FCA and PRA are enlisting the help of the BSA and CML to ensure KFIs meet their TCF standards because IT based CRM solutions are a total WOT.
Confused? Quick Move Now certainly was. Every industry has its TLAs, or Three Letter Acronyms, but that sentence really took it to another level.
We started wondering why the financial services, which confuses most people daily anyway, needs to be even more bewildering.
When we brought it up with Karen Smith, Area Manager for Newbury Building Society, she was just as horrified. So we asked her to explain why the industry needs to get bogged down with such jargon.
I am getting pretty fed up with it. They are rarely ever needed and I think it must just be in the DNA (Whoops, there we go again!) of the marketing Tristrams to believe that the art of great communication is simply to confuse. We received our latest lot of goodies to put in the branch windows with the cheery message that ‘This is the new POS poster’. I thought it was a Pile of Nothing of the Sort, when has a customer ever looked for a Point of Sale? It’s the branch window for goodness sake.
Obviously Karen agreed that sometimes they are necessary. Who wants a Bayerische Motoren Werke when a BMW sounds far sexier? But, can it go too far? Does Marks & Spencer really need to become ‘M&S’? Have they learned nothing from C&A? Karen added:
I don’t think life really is so busy that everything has to be shortened to initials. I’m sure that I believed the news more when it came from the British Broadcasting Corporation, rather than just the BBC – and don’t get me started on Radio 1’s use of ‘Beeb’.
But now, down to that first sentence that set us on the course of this journey. Karen explains;
The FCA is the Financial Conduct Authority. They regulate building societies, along with the PRA, the Prudential Regulation Authority, to ensure that customers get what they believe they are getting. The BSA (Building Societies Association) and CML (Council of Mortgage Lenders) are trade bodies. They look after the interests of Building and Mortgage Lenders, which means that building societies can be represented by both.
Sad to say, some lenders in the past may have focused on the good things about what they are selling you and only told you about the less good things if you asked them, a bit like buying a second hand car. Arfer Daley will tell you it is taxed, but you’d have to ask if the wheel was about to come off. When you need a mortgage, your chosen lender can no longer just tell you how much you would have to pay back each month. Products have become far too complicated for that.
So now every lender will issue you with a document that is consistent across the whole industry. This allows you to compare the offering of one lender with the offering of another. This is a good thing and is called the KFI (Key Facts Illustration). You may wonder why if it is only the key facts, it is five pages long and, indeed, how long it would be if it covered all the facts.
Can we really be expected to wade through some pretty complicated stuff just to ensure that we are not going to be ripped off at some time in the future though? Of course not – so the Financial Conduct Authority and Prudential Regulation Authority now requires all firms that it regulates, to TCF (Treat Customers Fairly). It is no longer possible for the unscrupulous to hide behind legal definitions and rules, they have to show that the customer has been treated fairly.
This is a very good thing. Especially for the IT (Information Technology) industry, who spotted an opportunity to create CRM (Customer Relationship Management) computer programs (they call them ‘solutions’) to enable businesses to look after their customers efficiently and evidence that they have done so.
And now is when I admit that a colleague of mine actually wrote the sentence that began our discussion and if I’m honest, he made up WOT, Waste of Time! But in his defence he claims it was only to counter the people who treat TLAs so seriously.