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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