3 reasons why organisations can’t stand still on UBO compliance

Jonathan Cowey, Business Director for Regulated Services at Webhelp UK, considers what the FCA’s new anti-money laundering bill means for UK financial organisations.

The demand for change 

Increased sanctions by the UK Government have made big headlines. As part of this, the Financial Conduct Authority (FCA) has written to all financial services firms regarding a new bill that is being fast tracked through the UK Parliament. This bill includes many things, one of which is a new register which mandates that all foreign owners of UK property must declare and verify their identity with Companies HouseThe purpose of this is to ultimately stop sanctioned individuals from buying and selling property in the UK for example – a long standing issue which has been exposed as a channel for money laundering.

What do firms need to be aware of and be thinking about? 

As part of their Anti-Money Laundering (AML) compliance, firms must consider UBOs – Ultimate Beneficiary Owners – of corporate organisations. UBO governance is not a new thing within UK finance, and has long been part of AML checks and due diligence both in terms of onboarding new clients into the financial system, and the ongoing monitoring of the account.  The whole point here is to know exactly who the beneficial owner of that company’s activity is – we need to ask ‘who is at the end of the chain?’  By properly assessing an individual UBO or a group of UBOs at both on-boarding and during the lifecycle of the client engagement, this will play a big part in ensuring a company isn’t inadvertently involved in financial crime. 

The latest message from the FCA is a firm and clear reminder to organisations that they should be fully assessing UBOs. 

So what’s the issue? 

Whilst many organisations are likely to be doing some form of UBO checking, there is growing concern that practices are outdated, acting as a tick box exercise as opposed to meaningfully seeking to understand the true end beneficiary. This isn’t overly surprising as UBO checks can be challenging. There are an estimated 3,000+ shell companies in the UK, so breaking through the layers of corporate structure to truly understand what is going on and by who isn’t an easy task. Finding your way through complicated corporate set-ups is something that takes time, skilland therefore cost. The reality is however, the FCA will want to see demonstrable evidence that organisations have undertaken the right level of due diligence and can show the right level of UBO informationwhether that be corporate structuresboard member information, fund attestation or proof of address…all certified of course. Bottom line, this isn’t a nice to have but a MUST do. 

Can organisations stand still? 

Simply put, no. Organisations can’t just rely on what they have always done. Here’s why: 

Firstly – it is their obligation; it’s a regulatory requirement, and failure to do this can see hefty fines imposed. There is major precedent for this too. The FCA levied nearly £570m of financial penalties on organisations during 2021, 84% of which (£477m) related directly to failings within AML compliance, with UBO being a key facet to this.

Secondly – costs. When not done correctly, the costs to remediate back books and the operational upheaval to put things right far outweighs the costs of simply getting it right in the first place.  

Thirdly – and most importantly in my view – ethically; it is the right thing to do. It is the moral obligation of institutes to ensure they are acting and enabling a safer, more secure world – their customers expect it of them. 

It's time to act

Taking a risk-based approach to compliance is always the right thing to do, but firms must shine a spotlight within their own organisations. The time to act is now, and firms should be undertaking a current state assessment against the existing landscape to ensure they are compliant. In order to do that, many firms are looking for partners to support them on that journey, bringing fresh industry perspectives, know-how and new solutions to the table. This isn’t an easy thing to do and gaining the right partner to do this in the right way (such as balancing costs, assessing the customer experience and properly mitigating risks) will be key.  

At Webhelp, we offer a full KYB/UBO compliance capability; consultancy expertise, technology solutions, as well as skilled KYB, AML and compliance resources globally to support you on this journey. We partner with many financial services organisations, both here in the UK and across the globe with their AML programmes.

Jonathan Cowey is the Business Director for UK Regulated Services at Webhelp. Please do not hesitate to get in touch if you have any questions and he will be happy to discuss with you


Where cryptocurrency meets Know Your Customer

There’s a strong case to be made that, as a society, we are in the advent stage of mainstream crypto. Consider the following three indicators: Firstly, it’s becoming seen as a normal part of our everyday life. The 2022 Superbowl saw over 112 million people tune in worldwide, with a significant portion watching the half time advertisements for FTX Trading and Crypto.com. There’s also been massive investment in Formula 1 and the English Premier League, with ByBit partnering with F1 champs Red Bull, and Dogecoin and CoinJar sponsoring Watford FC and Brentford FC, respectively. 

The second reason is that crypto is becoming much more stable than before. Many cautious investors were previously discouraged by crypto’s volatility and complexity. It was difficult for the average person on the street to understand its purpose or to predict its movements. That’s all now beginning to change – with more providers and greater participation from the wider public, the market has arguably become more stable and efficient. 

Lastly, crypto is becoming more widely recognised as a mainstream currency, making greater inroads to sit alongside fiat currencies used globally Increasingly, major banking services are offering crypto as part of their services. Revolut, for example, allows you to convert your cash into a wide selection of crypto currencies in just a few clicks. Opportunities have spread to other industries, with car dealerships as an example offering crypto as an alternative to traditional payment methods. 

As we sit on the cusp of a new era for crypto, the question we’re asking is – how critical is Know Your Customer going to be? 

KYC in a nutshell

Know Your Customer (KYC) is a fundamental part of an organisation’s risk management practice 

It involves: 

  1. establishing who your customer is,  
  2. verifying their identity,  
  3. building up a risk profiles of the customer, and then  
  4. monitoring that throughout the lifecycle of their engagement with the company 

What KYC Means

Anonymous by design

Crypto, by nature, takes a decentralised approach. It was originally designed and built in a manner that allows its customers to remain anonymous, and protect their personal information from central governing bodies. Anonymity has been crucial to this development since the very beginning – Satoshi Nakamoto, credited with developing and creating the concept, is a pseudonym used by an unknown individual or individuals – and therefore, the traditional rules of tracking customer information do not typically apply. As a result, KYC poses a major challenge for global regulators when it comes to the increasing growth of crypto.

Crypto organisations have been pressured of late to introduce KYC checks in order to be permitted to operate through global jurisdictions. Binance, for example, recently introduced ID and facial recognition checks in order to operate in, and through, the UK. The Financial Conduct Authority (FCA) has also gone further, cracking down on bitcoin ATMs and ordering the closure of all Bitcoin cashpoints in the UK. For the compliance specialist, some of these restrictions make a great deal of sense in the face of historic and current misuse of cryptocurrencies, as platforms for money laundering, fraud, and financing of terrorism, along with documented links to cyber warfare. 

To add to the complication is the recent rise in popularity of non-fungible tokens (NFTs), digital items – frequently artworks – that are traded for often extremely high values based on their inherent scarcity. In 2020, roughly $120m of NFTs were traded. In 2021, that number was closer to $21.5bn. The concern around NFTs is that they aren’t yet explicitly regulated, and are therefore not subject to the same scrutiny, exacerbating the potential issues around fraud and money laundering. 


Statue of Satoshi Nakamoto, Budapest, Hungary

New world, old solutions

The reluctance across the crypto community to comply with traditional regulation is strong, and its effect is very real. Many argue that it goes against the very foundations of the technology, and undermines the anonymous nature of crypto. As a result of the introduction of KYC measures, some firms – such as Coindesk – have seen huge losses in customer numbers. KYC can introduce friction and cost into the onboarding process, putting new customers off, and ultimately costing the firm more money. 

An additional consideration is whether the regulations are having the desired effect. With a suspected $9bn laundered through crypto in 2021, it’s clear that something still isn’t working. 

Part of the problem is clearly down to the processes and solutions being used, which often struggle to maintain effectiveness at scale as users and transactions increase. This is in part driven by a ‘lift-and-shift’ of traditional approaches to KYC, and trying to make them work in a non-traditional set-up. Another problem is that, unlike traditional FS organisations, in crypto organisations KYC often only enters the process once trading is enabled. This means trading can happen immediately, and any concerns need to be remediated at a later point in time, defeating the whole purpose of the check in the first place; put simply, it does not work. 

Whatever the reasons are, and there are numerous, it’s worth noting that a recent survey suggests that only 31% of crypto exchanges have complete and transparent KYC checks in place.  



What to do?

It’s inevitable, and welcomed, that some form of increased regulation will be introduced into crypto, but what that looks like is still uncertain. What is certain, however, is that if crypto organisations want to continue operating at scale, across global jurisdictions – and protect themselves against the impacts of getting things wrong – KYC should be a key priority for them. 

Contrary to some industry thinking, two things can be true at the same time: 

  • We should be able to live and operate in a world with strict privacy, where pseudonyms and direct, private interactions are possible 

and

  • We should be able to hold people accountable for wrongdoing, finding ways to quickly identify and deal with bad actors 

To do this, we need to ensure the correct balance, designing KYC in a way that doesn’t introduce cost or friction into the customer experience, while ensuring that the solution effectively does what it needs to do. 

By managing KYC in crypto in the right way, organisations will be able to: 

  • Improve customer transparency and trust, leading to greater adoption nationwide and globally 
  • Proactively combat the rising risks of money laundering, fraud and other scams 
  • Continue to improve the overall market stability, allowing firms to scale and grow 
  • Protect organisations’ profit and loss from regulatory and government sanctions. 

There’s no doubt that KYC process are going to become increasingly embedded within crypto, but the key is to use this for competitive advantage through elegantly designed solutions – whether that’s electronic ID verification (eIDV) , automation, streamlined UX or more. It’s all possible, and it’s all up for grabs. 


At Webhelp, we support our clients globally with KYC advice, solutions and implementation. Please get in touch if you have any questions. 

Jonathan Cowey

Business Director, Regulated Services

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The business case for customer-led transformation in financial services

The financial services (FS) sector is under increasing pressure to modernise operational models whilst driving profitability, improving customer experience (CX), managing higher levels of risk, and looking after its people. 

 

In this rapidly changing business environment, customer-led transformation can enable firms to tackle these challenges, get ahead of potential disruptors, provide the proper channels to retain customers, and become agile enough to pivot when consumer behaviours inevitably change.  

 

As such, the firms that will most successfully evolve are those that commit to holistic, flexible, and connected customer-led transformation programmes. This article explores the crucial business case for doing so, providing advice and examples to guide firms in the right direction.  

Why is customer-led transformation so crucial in Financial Services?

In a recent article, Webhelp Financial Services Managing Director, Hervé Mazenod, explored the next wave of challenges that organisations were facing, many of which are already coming to the fore.  

 

For the general population, the long-term issue of the rising cost of living is significantly impacting consumers’ financial well-being. Plus, we are seeing an exacerbation of the narrative around increasing wages, increasing resignations, and an inability to recruit adequately. 

  

Regulatory pressure continues to build, with the Financial Conduct Authority’s (FCA) proposed Consumer Duty being an example. While the Duty is there to protect customers, it will also complicate the supply of retail financial products and services for firms.  

 

Alongside these challenges, the importance of customer experience remains, with competition in the market continuing to grow relentlessly. In the UK, poor customer experience costs businesses over £37 billion per year, and there is a strong connection between customer satisfaction and sales gains, with companies seeing a 4.4% drop in sales when CSAT scores fall at least one point below the sector average.  

 

There are also continuous changes in consumer behaviour, with some considerable differences in customer experience expectations across Europe.  

 

Webhelp recently conducted a European survey to analyse customer perceptions of banking and insurance interactions. Here are some of the most prescient results.  

 

Customers prefer to avoid branch visits

Survey respondents preferred online channels, but voice was still popular in some countries. Still, interaction through a physical store or branch was the lowest preferred channel across Europe (19%). These findings mean that firms have an opportunity to better serve customers by investing in email, webchat, SMS, and social media, leading to enhanced customer experience and fewer overheads related to physical locations.  

 

Improving first-time resolution will boost loyalty

Around 25% of respondents said their provider did not resolve issues first time, and over 40% said it was a high effort to drive a resolution. When measuring these results against customer loyalty, 10% said they would reduce or cease their relationship with the business after their interaction, showing a clear opportunity to retain customers through improved experiences 

 

The threat of disruptive business models

Over 40% of customers said they would actively leave their current provider if brands such as Google or Amazon started offering banking services. By working to understand why customers would so willingly switch brands, businesses could pivot their offering to better meet customer needs, and pre-emptively disrupt the market.   

Customer needs are also becoming more complex and personal. With the proliferation of automation in the customer journey, the need for a human touch with empathetic customer experience agents will become more important for dealing with complex tasks. 

 

By meeting the combined weight of these challenges and recognising the customer’s evolving demands, firms have a clear opportunity to differentiate in the market – a differentiation that begins with developing a robust customer-led transformation programme. 


The outcomes of a successful transformation

The external factors justifying customer-led transformation are highly compelling, with a broad range of outcomes that firms can factor into an associated business case.

Higher Profitability

While customer experience transformation requires investment, the benefits quickly outweigh the costs. By focusing on fluidity of service, the often hidden cost of poor experience is brought to the surface as unnecessary hand-offs, delays, errors, queries and other failure points are gradually reduced.

Organisations can achieve higher productivity and create interactions that are of real value to customers;  leading to better reputation, a reduction in  operational headcount and an increase in potential revenue.

 

Enhanced customer experience

Ultimately, by giving customers efficient digital channels, fast resolutions, and personalised interactions at every step of the journey, the experience of dealing with your organisation becomes effortless, impactful, and worth talking about, attracting more customers and boosting business.  

 

Engaged people and talent

Creating awareness of the customer journey allows colleagues to see the value in their role and how their interactions fit the overall experience, increasing engagement and driving a continuous improvement mindset. This cultural shift results in less attrition and helps attract new talent to the organisation. 

 

More protection for customer and business 

Customer-led transformation can enhance debt management or financial support services during inflation and job insecurity, making firms trusted partners to customers. It can also help prevent fraud and other economic crimes since many aspects of transformation require a re-visiting of data security practices and systems.  

  

In striving to achieve these outcomes, what pitfalls can firms expect to face along the way? 


Friction in the transformation process

In our experience, many transformation initiatives appear to be sensible, well thought out, and rigorously planned, but they often fail to deliver the total value that stakeholders anticipated at the outset, and sometimes have negative impacts on other parts of the business and customer experience. 

 

Lack of an end-to-end view

Transformation programmes often focus on individual segments of the customer journey. For example, an insurance firm might hone in on transforming the underwriting process rather than the entire policy renewal process. This approach often fails to impact the customer as it neglects to improve all other steps in the journey. 

 

Not truly understanding the customer

Many enterprises fail to understand customer emotions because they map journeys based on their interactions rather than from a customer’s perspective. In our experience, the absence of end-to-end data systems holds organisations back even further, preventing them from joining the dots across the journey and seeing the first-hand customer experience.  

 

Failing to take a holistic approach

The actual cost of transformation can be significantly greater when organisations focus on single-point solutions that fail to take a broader, enterprise-level approach. For instance,  the automation of a mortgage decision/underwriting process should be one of a number of changes driven by a holistic design that looks at the overall experience of  the customer looking to move home (or at the very least looking for credit). Too often, these instances are single point solutions which do not link with a broader strategy. 

Transformation friction in the fraud customer journey

Along with these fallbacks, the financial services industry faces transformation barriers in many existing processes. Take fraud, for example. Identifying and verifying a genuine fraud case can often be lengthy and complex due to the numerous necessary steps required to manage risk and protect the customer. On one level, this friction is intentional and designed to identify potential fraudsters. But, on the other hand, it results in a fragmented process that adds to customer frustration and anxiety.    

 

In some of these cases, we’ve seen clients with up to 16 different security checks in one fraud customer journey. We’ve also seen dramatic differences in the language used by firms across their various communication channels, which can be confusing for customers and prevent fast and effortless resolutions. In both examples, the end-to-end journey was inefficient, and customers poorly rated the experience, despite the firms’ heavy investment into transformation. 

 

So how can firms approach a holistic transformation process that covers the entire customer journey, end-to-end, and functions successfully with a deep understanding of customer needs? 

Implementing end-to-end customer journey transformation

In our experience, there are four core elements to a successful customer-led transformation. 

 

Visualise the journey from the customer’s point of view

Take into account various customer personas, and focus on effort, failure points, actions, and emotions. Managing the customer journey is about creating insight and monitoring changes in customer behaviour to drive continuous data-led improvement, high performance, and positive customer experiences. 

 

Bring all parties together

All departments should play a part in the transformation and collaborate to create a customer-centric culture that harnesses the value of human capability. It’s all about ensuring that teams can complement one another’s abilities and employees are equipped with the skills, knowledge, and empowerment to do the right thing.  

 

Challenge the real need of the customer

When thinking of a mortgage, where does the customer journey start? Likely from the moment they consider moving house, not only when searching for financing. Recognising this means potentially including other actors outside of the organisation and then involving everyone in supporting that customer journey internally. 

 

Leverage data, insight, and supportive technology

Supportive technology can enable firms to harness new capabilities, create a seamless transition between solutions, optimise adoption through behavioural science, better predict consumer behaviour changes, and drive continuous improvement. In addition, the valuable data and insight gained from the right technology can allow proactive actions in response to customer behaviour and needs. 


Quality is free

In 1979, author and management theory contributor Phillip Crosby explored the concept thatquality is free, surmising an investment in the right place to get things right first time, is always preferable to being exposed to the higher costs of fixing issues as they arise.   

 

In making the business case for customer journey-led transformation, financial services firms can develop great customer experiences while unlocking a wide range of benefits across the organisation –  in other words, by applying the idea that “quality is free”, you could say that “great customer experience is free”.  

 

How’s that for a business case?


At Webhelp, we are primed to support you with any transformation plans you may have.

If it sounds like we could provide a solution for you, don’t hesitate to get in touch

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Hervé Mazenod

Managing Director, Financial Services

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Missing the customer: why human-centred design is key in delivering regulatory outcomes

Yee-Ping Pang, Head of Design and Development, and Faye Sadler-Clark, Head of Risk, Compliance & Innovation, explain the benefits of placing the customer experience at the centre of your regulatory outcomes

In every industry, it’s a certainty that one regulatory body will supervise the market – the FCA for financial services firms and financial markets, Ofcom for communications, and Ofgem for Gas and Electricity, to name a few. Independent regulatory bodies supervise the specific industry which they regulate and protect the consumer whilst ensuring that the market is operating fairly. The FCA for example, summarises that:

“Financial markets need to be honest, fair and effective so that consumers get a fair deal.”

The regulatory outcomes sought naturally differ across regulators, driven by the maturity of the industry and specific areas that need additional focus. However, there are similarities across some key topics such as protecting vulnerable customers, operational resilience of firms (the ability to continue to provide important business services throughout shocks or disruptions) and making switching easier for customers. The customer is very clearly at the centre of each of these areas of common regulatory concern.

As consumer consumption patterns change and industries evolve, the regulators continue to develop new and make changes to existing regulation in order to stay ahead of any changes in the industry alongside addressing the key risks in each sector. An example of new regulation is the much debated proposed Online Safety Bill, which is centred on protecting children and vulnerable individuals and applies to organisations that either host user-generated content or allow people to interact online. The landmark regulation seeks to protect users from ‘online harms’ in response to the ever-growing use of online platforms in generating and consuming content, which has increased rapidly during the COVID-19 pandemic.

An example of regulatory change came during the initial stages of the COVID-19 pandemic, where the FCA confirmed an increase in contactless payment thresholds from £45 to £100, increasing the convenience for consumers to buy goods safely. Sheldon Mills, Executive Director, Consumers and Competition at the FCA said: ‘During the pandemic more people have been using contactless payments. We are changing our rules to help the industry continue to respond to the changing ways in which people prefer to pay.’ This showcases both how regulators adapt to changing trends, and the role that regulation can play in enhancing customer experience to have the best outcomes for customers.

What is human-centred design, and how is it currently being used?

Human-centred design is a common technique used by designers across all industries. At the crux of it is a focus on the people who will be using the product or service. These may be external or internal customers (colleagues) who are using services such as the IT Service desk.

Using a combination of quantitative and qualitative research methods, the primary objective is to build understanding and deep empathy for the people for whom the product or service is being designed. Understanding customers’ thoughts, emotions, and behaviours, and defining the key themes from triangulation of all the research, is the foundation required to understand both what products and services to build, and how to build them. Pairing this with agile ways of working and iterative designs and feedback, we can see how powerful this is in adapting to constantly changing customer behaviours.

The benefits of design are compelling, with data from McKinsey showing that organisations regularly applying design thinking saw a third higher revenues and 56% higher shareholder returns than those who didn’t over a five-year period.

Human-centred design shifts the focus from designing solutions to solving problems and instils the mantra that the “customer is king”.

Source: McKinsey

Adding value by focusing on the customer for regulatory outcomes

So, what’s the common intersect between regulatory outcomes and human-centred design? Regulators are focused on protecting consumers and ensuring they get fair value, and human-centred design is entirely focused on designing for consumers. The consumer is at the heart of both.

For firms to stay ahead and really claim to be customer-first, they need to employ design approaches for their actual customer needs and circumstances, while ensuring that regulatory demands are still met.

Often, businesses view adhering to regulatory outcomes as something that must be done something that has a financial impact on their bottom line – and not as a value creator. Risk professionals need to help change the conversation from ‘what do we need to do to comply, and how much investment do we need for implementation?’ to ‘what is the intended regulatory outcome and what benefits could it bring us as a business?’ This change in mindset and conversation will put the focus on understanding why the market is shifting, which consumer problems need to be solved, and on the benefits that are often supportive in meeting strategic objectives on acquiring, retaining, and growing customer loyalty.

Focus on your customer needs to thrive

With COVID-19 recovery continuing to be the core focus for most businesses, strengthening capabilities in human-centred design, design thinking and user experience will be a key driver for growth, meeting customer needs and meeting regulatory outcomes.

In order to add real value, it’s important that risk and compliance teams continue to be inquisitive and understand the drivers behind regulatory change, and the movements within different markets and industries. Whilst organisations don’t have a choice about whether or not to comply with regulation using human centred design in responding to regulatory developments and changes can drive a competitive edge.

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KYC

B-Case – How does a bank manage KYC in a B2C marketplace… by using a non-dissuasive process?

Webhelp KYC bank

Webhelp supported a major international bank to manage all financial flows for its B2C marketplace customers through its specialised internal electronic money institution. Webhelp KYC Services carried out the entire vendor identification and onboarding process : a solution that means it was able to validate more than 10,000 vendors worldwide in just a few months.

This bank’s B2C marketplace customers offer their platform to thousands of vendors from around the world.

  • This sector of activity is regulated by the Sapin II law, which targets money laundering and financing of terrorism. Non-compliance fines are on the rise and are expected to exceed $400 billion by 2020 in Europe and the US.
  • This regulation requires that sellers and beneficiaries must have been formally identified by a KYC procedure (Know Your Customer) before they can operate in the marketplace.


The bank
 does not have an international task force to manage the KYC vendor registration process in the marketplace.

  • Legal constraint: where the vendor is a legal entity, beneficiaries must be personally identified when registering and then periodically as soon as they hold more than 25% of the capital.
  • The specific language and administrative requirements of each vendor’s country of origin must be taken into consideration.
  • Each country has its own specific requirements regarding connections to administrative databases.
  • Procedures for identifying and onboarding vendors must be fast and efficient enough not to be dissuasive, and reliable enough to comply with regulations.


In order to manage
 complex, multilingual and multi-country KYC procedures, Webhelp KYC Services has developed a project methodology that was rolled out in seven weeks. The organisation is based on five simultaneously processed areas: data collection (HMI), exchange security, APIs, acceptance rules, and management of reminders. Using our multilingual KYC hub, KYC identification operations can be managed in over 40 countries and in 15 languages. This takes into account each country’s specific administrative requirements and the KYC validation practices particular to the ordering parties. Generally speaking, only 55% of onboarding files are complete the first time around: Webhelp KYC Services uses a reminder program to optimise file completion.

The +: Onboarding a new vendor takes just a few minutes. Additional human verification, when necessary, is carried out in under twenty four hours.

“Unique in the market, our People & Solution procedure combines two components: a dedicated technical platform and multilingual operators trained in KYC verifications. It makes it possible to operate a multilingual, multi-country KYC service with a file rejection rate of less than five per cent.”

Hervé de Kermadec, president of Webhelp KYC Services


OneShot #5 - Influence

Our 5th edition of OneShot is here!

Download your OneShot magazine

Following the unprecedented situation of the COVID-19 pandemic, numerous companies have been forced to make vital adjustments to stay afloat and also guarantee business continuity. Our interesting reads also include:

A Word: KOL – Key Opinion Leader
A Number: 10,000 subscribers and no more
Three Opinions: Influence: How to get your messages across?
One News: TikTok supports its position in Europe
A Demo: The dark social
A B-Case: How Webhelp’s KYC participated in securing a platform by Bpifrance
A Hashtag: #TrustYourInfluencer
An Offer: MyStudioFactory
An appointment: Conversation 2020, Paris
A Conversation: How to restore confidence in the time of fake news?
A Story: Santa Claus, citizen of the New World

Read all about these exciting and thought-provoking topics in our 5th edition of OneShot.


Reimagining Service: Travel spotlight

In 2019 the outlook for travel was fairly optimistic in comparison to some other major sectors. It was at a place of maturity in customer experience, using the ability to emotionally and personally connect, whilst leveraging consumer behaviours to create buy in and deliver enhanced customer journeys.

Some disruption was evident, including financial fragility caused by the emergence of new players and go-between providers, like AIrBnB, and also a growing interest in personalised, sustainable eco-tourism. Both factors were impacting on the traditional value, luxury and price based market. Plus, technology was giving regional providers global reach, and bricks and mortar travel retailers were being challenged by digital startups.

The arrival of COVID-19 increased existing pressures, while lockdown and flight bans created income stasis and refund deficits. Cost sustainability is now a huge factor, especially for standalone venues and cases where low operating margins coincide with high cost distribution or intermediation, with go-betweens and resellers draining income flows.

What's next?

Thankfully, the industry is trading again, but the extended airline recovery period is likely to create immediate price hikes and a lack of availability in the leisure market. For business travellers and the corporate market, this recovery will be much longer.

We can expect short term growth in domestic markets, as people have less money and opportunity for international journeys. With global destinations limited, travel will become a simpler more meaningful and relationship-based activity. Lasting consumer trends will result, including a renewed interest in sustainable tourism and purposeful, enriching travel.

Two segments are emerging: The smaller, local, mid-market meaningful avenues for travel, versus luxury propositions. As companies jostle for space in this new world, mature customer service will be vital. But, there is a substantial learning curve required to develop as a seasoned customer advisor, with the depth of understanding needed covering the sector, brand and processes.

In tandem with the rise of homeworking, leisure travel will become blended with business needs, creating the new concept of ‘Bleisure’. Put simply, the human experience of travel and the need for personal contact and connection will be at the forefront of all these changes, and will be increasingly valued and promoted.

To discover more about customer service models post COVID-19 read our new Whitepaper, a joint publication with Gobeyond Partners, part of the Webhelp group, on Reimagining service for the new world which is underpinned by our unique industry perspective alongside new research to discover the operating models of the future.

 


Reimagining Service: Insurance spotlight

COVID-19 has dramatically impacted millions of lives and fundamentally changed the direction of the global economy, but what are the emerging implications for the insurance industry, which is currently inundated with enquires and claims across all area of cover?


Half a million UK businesses have shut down, 20% of the workforce furloughed and revenue expectations and profitability has been severely reduced. Whilst insurance was less visibly impacted than sectors like travel and tourism, 2020 losses are still estimated at a considerable $200bn globally. Survival has now become a medium-term question and with the expectation of legal challenges, consolidation and increased loss ratios, radical changes are on the horizon.

Flexibility and speed of response has created frontrunners, and interestingly, type of risk alone is not dictating the level of impact. This now hinges on multiple factors, including leadership, culture, digital maturity, and the way organisations have designed their operating model.

What's next?

There are some emerging characteristics for success, the most obvious perhaps being the critical business continuity provided by investing in supported homeworking, which has in many cases helped to increase productivity and decrease advisor attrition. A heightened focus on swift regulatory compliance and vigour in commitment to operational resilience has also been a crucial factor.

It’s clear that shifting business to digital platforms has created much needed traction too, but this reactionary approach must now become mature, otherwise it will continue to deliver fragmented and frustrating customer journeys. And, companies that invest in mitigating the human impact of the pandemic will reap the benefits in public perception and employee commitment and satisfaction.

Often borne out of necessity (like car or business insurance) or for peace of mind, like home and personal cover, insurance can coincide with major life events that carry a deep emotional impact, so concentrating on relationship building and platforms that inspire trust will help brands to build better experiences and drive scale.

Humanising, streamlining and redesigning operating models should remain high on the insurance transformation agenda, as a critical fulcrum for engaging and creating the customer loyalty. Insurance must now build on the momentum of change generated to thrive and ensure genuine longevity, in this new and challenging world.

To discover more about customer service models post COVID-19 read our new Whitepaper, a joint publication with Gobeyond Partners, part of the Webhelp group, on Reimagining service for the new world which is underpinned by our unique industry perspective alongside new research to discover the operating models of the future.


Reimagining Service: retail spotlight

The existing retail transformation agenda has been radically altered. And, while doors are now reopening following what could be the toughest ever period of trading, it is clear that the sector has been hugely impacted by the current crisis.

Many bricks and mortar stores (and even entire portfolios) are still teetering on the brink, so reduced footfall coupled with social distancing measures may render them un-viable. Government intervention may help in the medium term but, as cash reserves dwindle, insolvencies and consolidation will rise.

For multichannel retailers, digital growth has helped to subsidise bricks and mortar revenue. However those behind the curve on the digital agenda will suffer the most, with w-commerce and mixed model adoption (like click and collect) becoming a huge priority. Emerging winners will need established robust digital channels, a modern and scalable attitude to customer service, and have less exposure to costly store portfolios.

What's next?

Brick and mortar focused organisations will have to work much harder for success, as profit margins decrease. Options include undergoing restructuring, investing in omni-channel approaches, or exploring experiential outlets. But, ultimately, retailers must understand how to recreate brand and human experiences digitally.

Obsolete legacy retail teams must merge with digital teams for the benefit of the consumer and, importantly, new digital should not be layered onto an outdated operating model or “broken” customer journeys. Ideally, companies should be rethinking their new world customer experience from the ground up.

Delivering a seamless, consistent service through a blended home/office model will be a difficult balance to strike, especially as moving forward employees and customers will become less forgiving. So, being human and transparent has never been more important – but a laser-focus must remain on performance management and repeatable customer experience, irrespective of location and model.

This may be a tall order for those retailers with limited transformation funds, already reeling from the current shock. However, the first lesson in retail is to begin with a deep understanding of your customers: harnessing existing data and insight and ensuring that expertise and exemplary practices are in place when building new journeys, will be the best starting point for retailers to succeed on their digital journey.

To discover more about customer service models post COVID-19 read our new Whitepaper, a joint publication with Gobeyond Partners, part of the Webhelp group, on Reimagining service for the new world which is underpinned by our unique industry perspective alongside new research to discover the operating models of the future.

 


How AI and data analytics can support vulnerable customers

Well before the COVID-19 pandemic began, the identification and protection of vulnerable customers was a significant focus for companies and regulators. Here James Allen, Chief Risk & Technology Officer for Webelp UK Group looks at the impact it will have, now and in the future.

In these testing times, the identification and protection of vulnerable customers will now assume even more importance as organisations work on proactively recognising customers who need assistance, prior to the predicted surge in demand for financial support - as aids like employee furloughs, payment holidays and credit schemes end.

Worryingly, prior to the outbreak over half of the UK population were already financially vulnerable, with one in six people unable to cope with a £50 increase in monthly bills, according to a survey of Britain’s personal finances by the City regulator. The Financial Conduct Authority’s biggest ever survey of households found that 4.1 million people are already in serious financial difficulty, falling behind with bills and credit card payments, with 25- to 34-year-olds the most over-indebted.

Furthermore, 50% of adults (over 25.6 million people) “display one or more characteristics that signal their potential vulnerability” and just under 8 million are over-indebted.

And this is not limited to the UK, as the 2019 Prosperity Now Scorecard finds that forty percent of American households lack a basic level of savings and don’t have enough savings to make ends meet at the poverty level for three months if their income was interrupted. Almost half (48.1%) of Americans with credit had scores below prime and 20% of households had no credit in the past 12 months and were likely to be without access to it.

Furthermore, a report from the ING Group states that southern European economies like Italy and Spain are especially vulnerable to the economic effects of COVID, exacerbated by the importance of tourism which accounts for at least 13% of GDP and about 15% of total employment. They also have a larger share of vulnerable workers and a higher chance of bankruptcies due to firm size.

However, throughout all this we must remember that vulnerability can be a temporary and fluctuating status, with many causes, including mental health, dementia, changes in employment and personal circumstances, literacy, numeracy and socioeconomic factors.  It is key to use technology to help people on an individual basis, never forgetting that unique set of circumstances they may be experiencing.

Plus, regulators will be keeping a close eye on these new developments, and the pressure may soon be on firms to use all available routes to safeguard customers and prevent the global financial crisis from deepening.

So the question for many global companies has become, in the post COVID world, how do we identify and support customers who are financially vulnerable, without compromising operational efficiency?

And this is especially important for us at Webhelp, as we carry a people-first commitment and our think human value through to the customer base of over 32 clients in the UK, India and South Africa.

It’s clear that data analysis and artificial intelligence (AI) is already changing the way that companies offer support to their most vulnerable customers, and that this may play a part in reshaping the regulatory landscape. While establishing if someone is vulnerable and how best to support them is a very human judgment, at Webhelp we believe that sensitive and careful use of data, using AI to segment, can help direct the right customer support teams to the right people, spotting potential issues before they become a problem.

We combine the very best in technology and skilled people to create the best outcomes, as Chris Bryson, Webhelp Global Data & Analytics Director explains:

“We’re helping clients leave no stone unturned to reveal customer vulnerability. Whether customers tell us directly that they’re experiencing issues, or if they show characteristics of someone who can be vulnerable; using analytics from customer contacts and records helps us and our clients see those signals clearly.

We use our own unique speech and text analytics engine, which is applied to advisor and automated customer conversations. The resulting Voice of the Customer analytics drives constant improvements in the way we measure quality and enhances the overall customer experience.

As a result, we can help our clients to spot vulnerable customers who would otherwise slip through the net. At the heart, it’s about helping our advisors to better support that customer, and working with our clients to ensure they are recognising these signs of vulnerability.”

By using this insight, and access to the best analytical technology, and to the right people to put this in action for the greater good, we can confidently move forwards and create a better financial environment for both clients and customers in the future.

To discover more about customer service models post COVID-19 read our new Whitepaper, a joint publication with Gobeyond Partners, part of the Webhelp Group, on Reimagining service for the new world.                                        This aims to address these crucial questions and is underpinned by our unique industry perspective alongside new research to discover the operating models of the future.