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Look Forward – don’t fall into the same traps as previous failed remediation programmes
In the latest post in our ongoing series looking into the Motor Finance Scandal investigation, we gave our perspective on the sequence of next steps organisations should be planning to take in setting up a robust and proportionate remediation programme, following identifying any immediate quick wins now.
In this post, we will be looking at the common pitfalls organisations encounter when setting up a remediation programme, and how to avoid them.
Why are Remediation Programmes so important?
In the eyes of the Regulator, remediation programmes are fundamental to evidence firms are doing right by their customers. They also provide opportunities to improve the way in which firms operate, keeping markets competitive. Poorly run, inappropriately scoped or with limited oversight, remediation programmes can lead to firms being fined and their reputation tarnished. As a result, we are summarising below the risks you should be mitigating now:
1. Incomplete scoping: Significant operational, business, financial and reputational disruption can occur due to incomplete scoping, and/or lack of senior (and 2nd line) oversight on the review and challenge of key risks.
2. Lack of engagement / buy-in: Programme fatigue and lack of senior sponsorship can lead to limited engagement across the organisation and budget shortfalls. Underestimating effort and time can put the programme objectives at risk, inviting scrutiny from the Regulator, particularly where customer harm could be suspected.
3. Purposeless communications: A poorly defined communication strategy will increase the risk of customers not understanding what the programme outcomes mean for them and the support available, a breach of the key outcomes of Consumer Duty (1).
4. Ineffective governance: Unclear governance and escalation processes will lead to indecisiveness and delay programme execution, including clear and transparent customer decisions and communications to customers.
5. Poor data management: The Regulator has already cited data issues, such as incomplete sets, data held in more than one system, and data being held by several parties, as a blocker in the current investigation (2), meaning they are expecting firms to proactively review current data quality, accuracy, completeness and integrity. Failing to understand the requirements as part of your programme could lead to a cumbersome process with the Regulator, if you are called upon to provide data.
How can I mitigate the challenges ahead?
1. Take time to scope the programme and the associated risks, being clear on what you are trying to achieve and clearly linking to your business objectives.
2. Make sure documentation is clear and up to date, and time has been spent with your senior stakeholders to go through the complexity of the programme. Frequency of reporting is critically important to assess progress, achieve results and show leadership progress against remedial actions.
3. Pay close attention to consumer requirements, particularly the most vulnerable consumers, and make use of their preferred channels whilst delivering timely messages.
4. Stress test governance arrangements and proposed escalation routes making sure they are robust and enable the programme to progress at pace.
5. Become familiar with data sources, architecture and gaps, addressing vulnerabilities quickly and effectively within the programme.
6. Engage SMEs and suppliers early to shape your programme strategy and navigate pitfalls effectively.
How we can help
At Moorhouse, we are experienced in helping firms to establish, run and to provide assurance over remediation plans and programmes, as well as supporting firms in recovering failing remediation programmes.
If you’d like to hear more and discuss this further, please talk to one of our experts today.
In our final post in this 5-part series, we will be looking at the increased volume of complaints being seen across the industry, and exploring what you should be doing now to avoid being left behind.
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