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For Relationship Managers (RMs), the use of CRM technology in banking has become a hot button issue. More and more customer success teams are investigating whether adopting customer relationship management technology can optimise the customer experience, especially in an increasingly digital environment.

The global pandemic has accelerated a decade-long trend towards less human involvement in banking and more reliance on technology - as face-to-face visits with banking professionals are increasingly replaced by online services, chatbots and apps. While this has led to some improvements for customers - such as speedier transactions and 24/7 access - 78% of SMEs agreed that the digital transformation of banking needs to be balanced with a human touch.

It’s all about creating a blended, hybrid approach. One that balances the ease and accessibility of digitisation with the relational benefits of human interaction. An approach that puts customer experience at the centre of everything.

This is an approach that CRM technology can support.

What is a hybrid approach?

While digitisation has provided huge benefits to banks and customers alike, one area has suffered in the race to replace the bank on the high street with the app in your pocket. Customer experience. A staggering 58% of SMEs believe that the digital transformation of banking has caused a drop-off in the quality of service they receive as customers.

A hybrid approach combines digitisation with a human element to offset the challenges of each approach while strengthening the positives.

Better technology lets you leverage data at the most important stages of the customer journey - discovering exactly when customers want automation to streamline the process, and where they’d like genuine human interaction.

This is especially important for high value or complex deals where a reputation manager needs to get a hands-on feel for how a new customer’s business works, and for any unique requirements that will need to be handled.

By blending the smoother onboarding and risk reduction of digital banking with genuine human connection, you can offer the best of both worlds.

Can adopting CRM technology really put the human element back into banking?

The main issue most customers have with digital banking is a feeling that they’re on a computerised conveyor belt. Things happen because computers say so, and there’s no opportunity to stop or to change direction.

Customers want to feel valued, and the banking industry needs to support them with a real human connection. The use of CRM technology supports that human touch, identifying critical stages where a personal call, email or meeting will provide that real feeling of value for the customer.

And because this human element is backed by the benefits of automation, banks can use customer relationship management systems to stand out from the competition with frictionless onboarding journeys.

It’s not just about putting people back into the process. It’s about supporting those people to make life easier for customers at every stage of the journey.

How should RMs use CRM technology to optimise customer experience?

As we found in our report, written in collaboration with FinTech Futures, RMs are making more and more use of CRM technology. RMs now have more work than ever before, often dealing with huge numbers of clients, all of whom expect a more personal service.

The use of CRM tech to track these customers and provide RMs with in-depth information allows for a much deeper personal connection. It’s no longer on an individual RM to remember facts and figures or find time to set meetings and arrange calls - instead, the CRM system collects and leverages customer data to aid RMs.

Instead of digitisation placing customers on a conveyor belt, adopting customer relationship management technology allows banks and RMs to form deeper, more meaningful customer relationships and provide a better, streamlined customer experience.

Adopting customer relationship management technology with FullCircl

FullCircl can help you to adopt a true hybrid approach, providing your customers with the very best of digital and personal banking services. By correctly interpreting and leveraging data, we’ll empower you to make the best use of your expertise and offer a much better customer experience to your key clients.

Download your free copy of the report here.

Alternatively if you have any questions about adopting CRM technology or the services FullCircl can provide, email letstalk@fullcircl.com.

In 2023, regulated businesses are navigating a highly dynamic regulatory landscape. With financial crime and AML failures a key area of focus for FCA enforcement action, a high-functioning due diligence framework has never been more vital to ensuring compliance, whilst supporting growth, innovation and improving the customer experience.

Let’s start with the basics…

What is Customer Due Diligence?

Customer Due Diligence (CDD) is the process of identifying your customers, checking they are exactly who they say they are, and ensuring they are properly risk-assessed before being onboarded. CDD sits at the heart of Anti-Money Laundering (AML) and Know Your Customer (KYC) initiatives.

What does Customer Due Diligence look like in practice?

AML requirements in the UK are based on several key Acts including The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017, The Financial Services and Markets Act 2000 (FSMA) and the Proceeds of Crime Act 2002.

In simple terms financial institutions must carry out CDD measures when establishing a new business relationship, undertaking occasional transactions, when it suspects nefarious activity or when it doubts the accuracy or adequacy of customer information. When carrying out CDD measures a regulated business must:

• Verify the customer’s identity
• Identify and verify beneficial ownerships (for business entities)
• Understand the ownership and control structures of a legal person, trust, company, foundation, or other entity
• Assess and obtain information pursuant to the purpose and nature of the business relationship or transaction

The complexity of financial crime remains a huge challenge for businesses. Combined with rapidly evolving geo-political events and sanctions, regulated businesses are increasingly taking a risk-based approach to customer due diligence, moving beyond standard CDD to enhance customer identity assurance.

What is Enhanced Due Diligence?

Enhanced Due Diligence (EDD) is an extension of CDD. EDD is a set of measures applied, using a risk-based approach, to investigate potentially high-risk customers or transactions and gather more evidence and detailed intelligence.

High-risk customers might include, for example, those subject to economic sanctions or operating in countries without adequate AML controls, customers with complex ultimate beneficial ownership (UBO) structures, companies managed by politically exposed persons (PEPs), or businesses operating in countries with significant levels of corruption, criminal activity or terrorist activity.

EDD provides a greater level of scrutiny of potential business partnerships and highlights risk that cannot be detected by standard customer due diligence checks. EDD measures may include adverse media screening, obtaining additional identifying information, analysing the source of funds, scrutinising Ultimate Beneficial Ownership (UBO) and transaction screening.

What is the difference between CDD and EDD?

Essentially, CDD and enhanced due diligence are different levels of background checks. The key difference between CDD and EDD arises as a result of a customer risk assessment. If through a risk-based approach to assessment a customer is deemed to present a normal level of risk, they can go through CDD, however if it’s apparent that they present a higher level of risk, they are required to undergo EDD.

But - and it’s an important but - CDD doesn’t end at the customer verification and onboarding stage.

What is Continuous Due Diligence?

Customer behaviour changes and risk profiles evolve. Continuous due diligence, also referred to as Ongoing Customer Due Diligence (OCDD) or Perpetual Due Diligence (PDD), refers to a risk-based in-life monitoring approach, based upon risk events and triggers and identifying risk patterns, for maintaining KYC/KYB information and monitoring customers for the risks they pose for money laundering and other financial crimes.

EY recently described continuous due diligence as a transformative strategy, beneficial, less burdensome, and less costly for regulated business and their customers. They also stipulated that transformation requires investment in technology and data, including trusted data sources, integrated triggering events, data logic, adverse media screening, and automated updating of customer information.

Ready to go beyond standard due diligence?

Customer Lifecycle Intelligence (CLI) from FullCircl goes way beyond standard due diligence, through the use of automated data collection and execution of critical checks and processes to deliver continuous due diligence. The result being regulated businesses can ensure compliance through proactive risk mitigation – targeting efforts where it is needed in line with their policies and risk appetite.

The ultimate risk-based approach, CLI utilises technology to connect data points that can be used to expose potential risk trends and connections across networks of people and businesses, as well as providing the ability to overlay policy decisioning and risk appetite across trigger changes – generating targeted and actionable events, prioritising remediation to the highest risk activity and delivering consistency of decisioning and efficiency benefits in AML and KYC.

Head over to our Resources Hub for more information about our web app, API, decision engine, and due diligence tools, including specific guidance on UBOs, PEPs and sanctions, adverse director history, CCJs and legal notices.

Get in touch to find out how we can supercharge customer onboarding and due diligence - so you can do Better Business, Faster

In February 2023, the British government marked the one-year anniversary of the invasion of Ukraine by issuing further sanctions against Russia.

Doubling down on efforts to cripple the Russian economy, and Putin’s ability to wage war on Ukraine, the Foreign Secretary announced a package of sanctions including export bans on every item Russia has used on the battlefield, import bans of iron and steel goods, 1,500 additional FCDO targets, and 92 individuals and entities (including 4 banks).

Indeed, the UK sanctions list now covers more than 1,551 of Russian’s most significant and high-value individuals and 180 corporate entities and subsidiaries, effectively shutting out huge sectors of the Russian Economy from international markets.

Complex, volatile, and rapidly evolving, the current global sanctions landscape, with its vast range of country-specific regulations, is a huge compliance challenge for financial institutions (FIs). In total, the latest sanctions list update covers 3,788 individuals and entities from 23 countries, plus specific sanctions lists covering ISIS and Al Qaeda, chemical weapons, counter terrorism, cyber, anti-corruption and human rights.

A complex geopolitical landscape

FIs are required to ensure that the individuals, entities, and subsidiaries they do business with are not subject to sanctions. However, achieving compliance and staying compliant is an incredibly complex process. Increasing regulatory scrutiny, as well as the inconsistent nature of global regimes, is putting intense pressure on FIs to raise the bar for sanctions compliance and awareness.

As part of customer due diligence, including know-your-customer (KYC) and know-your-business (KYB) checks, FIs need to be able to scrutinise their customer base to:

• Offer support to Ukrainian businesses or companies with Ukrainian links
• Improve awareness of companies with links to sanctioned countries, organisations, and individuals
• Identify Ultimate Beneficial Owners (UBOs) from sanctioned countries and organisations
• React quickly to regulatory change.

FullCircl has a number of tools to help

Take a look at our Russia-Ukraine guidance note covering:

• Company reports
• Company ownership and UBOs – including our UBO API endpoint
• Watchlists and watchlist filters.

In addition, we also provide:

• Adverse Director History Premium Data Extension
• HMRC Imports and Exports Premium Data Extension
• International Premium Data Extension
• CCJ and legal Notices Premium data Extension

If you thought the FCA would back off following a raft of heavy fines imposed for breaches relating to anti-money laundering (AML) systems and controls in 2022 - think again.

Doubling down on efforts to reduce and prevent financial crime, the regulator has started 2023 the way it means to go on by issuing several multi-million pound enforcement actions in the first few weeks of the new year.

FCA principle 3 – Management & Control

The enforcements taken so far this year centre on failures under Principle 3 of its handbook – Management & Control. This requires that banks and financial service providers take reasonable care to organise and control their affairs responsibly and effectively, with adequate risk management systems.

It’s worth noting the FCA doesn’t require an incident of money laundering to have actually occurred in order to take enforcement action under Principle 3. The requirement is simply that management and control failures have the potential for money laundering risk.

Let’s take a look at four common failings, and examples of best practice responses from the financial service industry…

Best Practice AML Risk Management Systems

1. Insufficient Onboarding intelligence

The FCA requires firms to apply appropriate Know Your Customer (KYC), customer due diligence (CDD) and enhanced due diligence (EDD) measures when establishing new commercial relationships. KYC is the backbone of a robust AML control framework. Shortcomings in KYC, CDD and EDD at onboarding stage negatively impact the robustness of risk management controls throughout the customer lifecycle.

Santander is shining example of a bank that has fully committed to plugging the highly publicised gaps in its AML controls at onboarding stage, to ensure they meet the FCAs high standards for compliance and risk management. Santander created a fully digital onboarding process that streamlines the customer experience, whilst ensuring all necessary KYC, CDD and EDD checks are performed by surfacing connected intelligence from billions of validated and verified third party data sources.

Not only does this mean Santander complies with Principle 3, but they also meet demanding CX expectations. Santander has successfully reduced time to onboard 75% of complex customers from the previous 14-21 days, to just five days.

2. Inadequate continuous monitoring

Unfortunately, there is still a strong reliance on periodic reviews and manual approaches across the financial services industry, leaving banks and financial institutions at risk of failing to meet FCA expectations regarding ongoing monitoring – whether that be of customers or the supply chain.

Schroders Personal Wealth (SPW) offer a fantastic example of industry recognised continuous in-life monitoring approach.

If an FSI lacks complete real-time transparency and visibility over its entire supply chain ecosystem, then unidentified material changes can breach regulatory and legal compliance.

SPW harnesses a multitude of official and third-party sources to provide a real-time, accurate and contextualised view about any supply chain organisation, large or small. SPW monitors 366 3rd, 4th, and 5th party suppliers daily, 160 of which support its critical business process. Layered over this rich real-time business intelligence SPW harnesses a rules engine customised to the unique visibility needs of its supply chain. Using 28 bespoke rules it automatically spots specific risk triggers - including non-compliance with regulations, increased debtor days, directorship changes, UBOs, insolvencies, changes in credit score, Delphi score reductions, and potentially high-risk countries and/or industries – to always achieve a mission control view over its entire supply chain ecosystem.

3. Lack of prompt action

A common failure is the inability to spot and act on red flags immediately. To ensure compliance with Principle 3, banks and FSIs need their compliance teams to be automatically notified of changes to clients’ credit scores, adverse media, CCJs, Gazette notices, adverse director history, PEPs and sanctions lists and more. This ensures they are not only protected from exposure to unnecessary AML risks, but that they can remediate risks quickly and efficiently.

Metro Bank has taken a revolutionary tech-driven approach to bringing compliance and KYC into the forefront of its business and commercial banking activities. Abandoning analogue processes in favour of a data-driven approach, Metro Bank knows more, knows sooner, and saves valuable time in the process - finding 14% more critical risk issues and reducing the average case time from 200 minutes to 8 minutes (a 94% improvement).

4. Failure to align process to policies

To be fully compliant with FCA rules and money laundering regulations, a bank's or FSI’s processes also need to match their policies.  

In response, many banks and FSI’s have integrated a rules-based decision engine to automate KYC and AML checks and achieve complete customised control of their compliance with Principle 3. One such institution is Metro Bank, who have implemented policies with a decision engine for faster, automated KYC, AML, and credit checks.

Metro Bank combines everything it knows about its customers, business, and market, and leverages an advanced decision engine that ingests millions of structured and unstructured data points to layer on top of that know-how. This approach quickly delivers the impactful insights and risk intelligence needed for next-generation prospecting, customer monitoring and engagement, advanced onboarding, and ongoing assessment of portfolio risks and opportunities.

By aggregating data from a multitude of different sources and mapping that intelligence to its risk appetite-based rules framework it can flag issues immediately and deliver an onboarding process that is 94% faster than previously achieved.

Don’t risk finding yourself in the glare of the FCA’s spotlight

The FCA has made it clear - there is simply no excuse for a failure to comply with money laundering rules and regulations. If you’re interested in learning how FullCircl can deliver complete confidence in your KYB and AML risk management systems, please get in touch.

The pandemic certainly accelerated digital transformation in the insurance sector. For an industry that had long been perceived as lagging behind its financial service peers, insurance businesses demonstrated remarkable agility, flexibility, and resilience in overcoming a host of obstacles. But in 2023 the challenges continue to mount.

There’s a need to refocus once again in the face of tough economic and geo-political circumstances, and a persistent urgency remains to reinvigorate the customer experience in line with evolving post-pandemic expectations, especially in the traditionally underserved SME sector.

Vast changes are still needed. But the window to make them is shrinking, and the need to accelerate next-generation digitisation is greater than ever.

What does the future of insurance look like?

To answer that question, we asked the people helping to shape it.

For our latest whitepaper we spoke to experts from across the insurance industry to understand the key challenges insurers, brokers and MGA’s are facing. With insights from commentators from both the Lloyds and company markets, as well as the fintech/insurtech community, our report sets out:

• The current state of play
• The need for innovation and the appetite for change
• Why embracing new technology is vital
  
• What insurtech 2.0 really looks like

To find out how to use data and technology to build a more customer-centric insurance future, download your free copy now.

It’s getting tougher for commercial lines brokers to compete on price alone.

Harsher economic conditions have created a hard market, with insurers setting higher premiums and less generous policy terms. This is due to increased risks in the business environment caused by Brexit, the pandemic and Russia’s war with Ukraine; plus double-digit inflation hiking the cost of replacing stolen or damaged items.

In this more complex market, brokers are finding it harder to win new clients and keep them. They are also having to justify premium hikes in a way that doesn’t damage hard-won and important relationships with their clients. All of this makes maintaining a competitive advantage in the insurance industry a challenge.

Cheapest doesn’t cut it

Before the pandemic and in other times where the market was much more buoyant, some brokers felt they could win and retain customers simply by looking for the cheapest quote for them; however, in the hard market currently being experienced by the industry, brokers need to do much more to remain competitive, compliant and attractive to new/existing clients.

Price will always be important, of course it will, but there are other, more innovative, ways to achieve a competitive advantage in the insurance industry. In-depth market-led customer service is becoming key. Brokers wanting to remain competitive in a market where premiums are increasingly expensive should focus more on advising clients about the best scope and terms of cover, with regular communication and data-led insights.

They should delight the customer at the onboarding stage and continue to offer them vital data and insights through the policy term. The days of engaging with the customer at the onboarding and renewal stages are well and truly over. This article will discuss broader means than simply premium costs that will keep clients engaged and help your insurance brokerage establish and maintain a competitive advantage in an increasingly hard market. So where do you start?

Tactics for a competitive advantage in the insurance industry

Boost your know-how

Holding chartered status with the Chartered Insurance Institute (CII) is a good sign that the broker prioritises technical knowledge and understanding.

Customers know that, while many excellent brokers do not hold Chartered status, not having Chartered status can sometimes skew the focus onto price, rather than all-round advice. Customers realise that focusing on price only could ultimately hurt them if the policy doesn’t cover their needs fully.

Competitive insurance brokers can have much better conversations with clients by building their know-how and understanding of:

• Key issues impacting the underwriter
• Their specialist industry
• Each client’s situation
• Technical terms, contracts, and risks

A Customer Lifecycle Intelligence (CLI) platform is critical as it provides good data and insights on companies, sectors, risks and much more. It can alert you to any changes and allow you to intervene if one of your clients is flagged as potentially being in trouble.

Get friendly with your underwriters

The commercial lines insurance brokers with a competitive advantage tend to have fostered good relations with underwriters to ensure they get fast and favourable quotes. This includes taking time to understand what’s happening in each underwriter’s world. Like any business, having a good relationship with your contact and developing a solid track record of excellent conduct will keep you front of mind. The hard market makes it even more important in the relationship building/maintenance between underwriter and broker.

Take the Financial Services and Markets Bill, currently moving through the House of Lords. This bill will attempt to improve the UK’s global competitiveness post-Brexit by repealing some EU financial services laws with the aim of making the legislation meet the specific needs of insurers and other financial institutions based in the UK.

This includes replacing the Solvency II regulations with a proposed Solvency UK regime that aims to increase flexibility for UK insurers and free their capital for investment in technology and infrastructure. In theory, it should allow insurers the opportunity to be more price and risk-friendly which will certainly offer competitive advantages.

Brokers will need to have an in-depth understanding of how UK-based insurers are responding to the Financial Services and Markets Bill, and who could quote them better prices and terms as a result.

Target underinsurance in your specialist sector

Underinsurance is a massive threat in the current market, and can leave companies significantly exposed. Challenges such as war in Ukraine, inflation and more extreme weather could mean companies unwittingly have much less cover than they need in policies from property and asset insurance to key person cover. One example of this is a policy that covers the company for a pre-agreed insured sum in the incidence of a fire but has not taken into account how double-digit inflation has increased the cost of materials.

Gaps are widening between the sum insured figure and real time replacement costs and it’s vital to keep on top of how this is impacting - or exposing - your clients.

Brokers wishing to maintain a competitive advantage in the insurance industry will avoid fear-mongering around these issues and instead discuss, collaboratively, the importance of protecting against those risks at the right level. They use real time data-driven insights to support that conversation and, where necessary, ask the client for more details to ensure they get the right cover for the next year.

A good broker will also keep an eye out in case companies become underinsured mid-term, advising them of this accordingly and having a solution ready and waiting.

Up-to-the-minute data insights could help with cross and upselling to your portfolio as well.

A CLI platform can help you stay competitive

In-depth data from a CLI platform could, for example, show how growing export turnover is the perfect time to discuss marine insurance. Falling cash reserves should spark a chat about trade credit insurance.

If data shows that client’s revenue and profit are growing fast, you can talk about increasing cover in their business interruption policies. A good knowledge of the client’s previous revenue and profit figures over several years can help guide that conversation, as it shows their growth trajectory.

All these data-led conversations can boost loyalty by ensuring your client makes well-informed decisions. A client facing unique worries in their particular sector will appreciate your looking out for them and keeping their needs at the forefront. Plus you’re more likely to keep the business at renewal if you’re giving data-based advice that is based on up-to-date information.

Rival brokers without that capability will not have anywhere near as much to work with when trying to demonstrate their value.

Grow your customer service 

Competitive commercial insurance brokers build their reputation as trusted advisers with a continuously proactive approach throughout the policy term.

Don’t go silent for 12 months until it’s time for renewal. Keep in touch with clients to find out if there have been any relevant changes. Customer service is more than simply reacting when your client needs something. The level of customer service that you need to achieve to remain competitive in a hard market is proactive as well.

Using data and insights to inform them of events that might affect their policies, such as new regulations or legal amendments, will showcase your value and engender the kind of trust and relationships that will be beneficial, come renewal

Check in with your clients regularly, even if they only have time for a 15 minute call. This allows you to temperature check and gauge how your contacts are feeling while adding value to those conversations with tailored, real-time data and insights.

Track important company events and personnel changes

When policies lapse or are lost to other brokers, it can be due to a senior management change - for example, if the new finance director’s previous broker follows them to the new organisation.

Many brokers with a competitive advantage in the insurance industry make use of a CLI platform that alerts them if any senior managers leave their commercial customers. This allows them to call up, advise that they are aware of the change and request a meeting with the new senior manager to ensure the cover remains up to date.

A platform can offer a long list of customisable alerts, including for events that may trigger potential claims, from floods to health and safety investigations. This enables you to proactively reach out to clients and help them. It gives you genuine reasons for getting in touch and building credibility.

If possible, as well as a regular status check, have quarterly in-depth catch-up meetings with the client, and involve insurers where necessary. Build tripartite relationships, working together with the client and insurer to get the best terms. This improves trust and confidence with the client because they know whoever looks after their policy and any claims personally.

How FullCircl can help you maintain a competitive advantage

FullCircl‘s revolutionary CLI platform helps you sharpen your focus on the companies that fit your specialisms and sector.

It empowers your team with rich, contextualised information on every business in the UK and Ireland, and can boost your sales capacity tenfold. It provides everything you need for precision prospecting, with real-time data on filters from geography to turnover, headcount and fleet size.

FullCircl provides tailorable filters that alert you to key client events – such as management changes, expansions, or changes to risk profile. It also offers real-time information on claimable events, such as disasters in filtered regions, and legal changes.

This helps you give prospects and clients the right support and guidance when they need it, and in turn gives you a competitive advantage.

Drop us a line to find out more.