Cost of Compliance burden exposed for Retail Financial Services
London, UK. Wednesday 29th March, 2006.
65% of UK retail bank and insurance organisations claim industry regulations are placing additional cost burdens on them and restricting their ability to differentiate their products.
According to research carried out on behalf of Thunderhead, the leading provider of document generation technology, and Xansa, the outsourcing and technology experts, the fear of falling foul of compliance legislation – designed to improve the quality and clarity of communication to customers – is distracting companies from addressing the customer service experience.
46% of those surveyed admitted it was either difficult or very difficult to affect the mandatory changes to documents necessary to meet deadlines such as the impending A-Day on 6th April 2006.
“The survey revealed that the cost of changing documents to meet new compliance requirements can run into many thousands of pounds just to change a single letter,” said Glen Manchester, CEO, Thunderhead. “With the typical retail bank or insurance company managing thousands of different document templates, the cost of compliance easily spirals out of control. However, with deadlines such as A-Day looming, ensuring customer communications are compliant is not optional. The hidden cost of compliance is in danger of having a real impact on the ability of financial services organisations to compete.”
In response to the opportunities uncovered by the research, Thunderhead and Xansa have today announced a partnership in the UK to help retail banking and insurance organisations generate compliant customer communications. Working together, Xansa and Thunderhead will offer UK financial institutions document generation solutions that combine best-in-class technology with consulting resources and expertise.
“Communication must be cost effective and compliant but unless organisations can unlock the customer service potential of improved customer documentation, they are missing thousands of opportunities to impact their business,” said Mike Lusby, Market Development Director, Xansa. “For most organisations, the fear of compliance is dominating to the detriment of customer friendly communication. Unless businesses can find a way to comply and compete, their communication becomes a poison pen to their productivity.”
Key findings uncovered by the survey of UK retail banks and insurance companies include:
Many organisations are trying to support over 10,000 document templates – each subject to changing compliance regulations.
58% of respondents claimed compliance, and the penalty for non-compliance, will make it imperative to move to a more efficient customer documentation system.
Only 10% of respondents said it was currently very easy to make changes to documents imposed by the FSA.
65% said the cost to the organisation of effecting any necessary changes to templates as a result of FSA regulatory changes would be very or quite costly. Only 5% believed if would not be costly at all.
71% believed improved documentation would provide a competitive edge by enabling them to increase their brand values.
But only 15% of organisations have already implemented radical change to their customer documentation process leaving the majority of the industry still racing to meet costly compliance deadlines.
A whitepaper outlining the findings of the research is available for download.
About Xansa
Xansa is an outsourcing and technology company.
Committed to delivering guaranteed business outcomes through a combination of technology and process expertise, we give our clients the freedom to do more with their business.
Strong relationships, commercial innovation and our integrated Indian delivery capability ensure that we drive real and long-term cost reductions, performance improvements and new ways of working tailored to each client.
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