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THE RIGHT WAY TO END RISKY BUSINESS

13/05/2019

Richard Mill from Business Systems (UK) on why Workforce Optimisation (WFO) could be a huge help in mitigating the risk of illegal staff conduct

The FCA’s conduct risk agenda is driven by a need to make financial markets and services work in the best interests of customers. But how many financial services firms are meeting all its recommendations?

The FCA places an expectation on companies to commit themselves to full compliance with the spirit of regulations, rather than simply adopting a tick-box approach. To help, it sets out five questions it expects businesses to be able to answer formally with evidence in order to demonstrate compliance with the agenda:

Richard Mill
  • What proactive steps are you taking to identify conduct risks?
  • How do you encourage people in front, middle, back office, control and support functions to feel responsible for managing conduct?
  • What support does your firm put in place to help your people improve their conduct?
  • How does the firm’s board and executive committee get oversight of conduct?
  • Has your organisation looked at any business activities it is engaged in that could be working to undermine your work in this area?

So what about City best practice? Is it in alignment? In 2016, Ernst & Young undertook a study of attitudes to conduct risk across the UK finance sector in order to gauge where organisations felt they needed to change and what they recognised as the main challenges. Two key areas were flagged up: monitoring of staff performance and changing culture, and product design and governance. On the first issue, for example, the study says real challenges for the financial services organisations it polled included the ability to articulate and evidence current behaviour so as to better align desired change activities so they were consistent and effective. In addition, its researchers found putting infrastructures in place that would allow senior leaders to effectively monitor activity throughout an organisation, and therefore be able to take full responsibility, was too weak in the workplaces it contacted.

On product design and governance, meanwhile, the report highlights how many providers do not have effective risk profiling protocols in place – plus, that there was widespread failure to monitor who bought which products and therefore trace performance ‘in the wild’. Finally, the Big Four firm’s experts tell us that compliance procedures were not supplying information that could be used to identify product failings, and that there was little or no disclosure about product performance.

Across all of these areas, it seems, a general theme of deficiencies in data, monitoring and reporting emerges. Organisations seem to struggle to take proactive steps to identify risks in behaviour or products. Why? Because there is no joined-up approach to monitoring quality assurance (QA) and service level metrics – nor are there protocols in place to channel relevant data up the chain of command. Essentially, product performance is not monitored after point of sale, customer feedback is not used effectively, and there is no real coordinated oversight across front and back office, control and support.

All in all, such findings – among others, worryingly – underline how having effective data and intelligence procedures in place represents a significant barrier to firms being able to answer any of the FCA’s five questions the way the regulator is demanding. And that is a serious issue.

How back office workforce optimisation can help

The good news is that a new tool is available that can genuinely address some of these issues – and help you get nearer to that all-important FCA finish line.

That’s in the shape of something called Workforce Optimisation (WFO) – software which takes a data-led approach to streamlining operations and achieving greater efficiency. Long used in front end operations like contact centres, WFO platforms link sophisticated real-time monitoring capabilities to functions like work allocation and robotic process automation (RPA). The result: agent availability increases and decreases with the ebb and flow of demand, the right people get the right tasks at the right time – and basic repetitive tasks become automated, freeing up human resources for more complicated, valuable work.

Workflow across the whole piece

So how precisely should we do this to help address our risk position? The ideal scenario is to extend WFO from the front to the back office, thus at a stroke allowing all operations to enjoy the benefits of greater efficiency and integration.

A modern modular, highly flexible WFO solution will do just that – controlling and monitoring workflows through all parts of an organisation. That means it will integrate valuable data streams from many disparate points, bringing critical information together into a single management dashboard – which makes it an ideal solution to help financial services organisations overcome those barriers to mitigating and tracking any conduct risk.

Overall, the tech provides clear, actionable intelligence on all areas related to service quality. Given the FCA’s demand to create a successful regulatory agenda that promotes positive outcomes for both customers and our vital financial markets through cultural compliance, a modern WFO platform could become a truly invaluable tool. The first task, after all, in bringing behaviour and performance into line with established standards – and then keeping them at those levels – is genuine, data-driven, insight into what is happening across your organisation.

Customers who’ve implemented WFO say the same. Workforce optimisation platforms that work across the back and front office drawing data from multiple touchpoints to provide a rich real-time illustration of behaviour and performance provide the only really solid foundations for true FCA compliance.

The author is Managing Director of Business Systems (UK) Ltd, a specialist in providing call recording and workforce optimisation solutions

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Finance Derivative is a global financial and business analysis magazine, published by FM.Publishing. It is a yearly print and online magazine providing broad coverage and analysis of the financial industry, international business and the global economy.