Siddharth Parashar, Chief Financial Officer at Firstsource Solutions
With the FCA’s announcement in mid-August that the implementation of Strong Customer Authentication (SCA) has been postponed by 18 months, banks and the financial services sector breathed a sigh of relief. With the previous deadline just days away, it was clear that both businesses and consumers were unprepared for many of the changes and challenges that SCA would bring. Now, with a new deadline and extra time to increase awareness and ensure processes are in place, it is time that all public and private sector stakeholders come together to review how it can be a success.
Where to start?
SCA is going to be a massive change for both business and consumers. Consequently, there needs to be a large education programme taking place that lets businesses know what is happening, how it will affect them, and informs consumers on what to expect. However, while some financial sector organisations have carried out advice and information campaigns aimed at their own customers, an industry-wide campaign would be more effective. This, however, should not only be on the private sector to handle and instead needs to include government and regulatory bodies too. Having one clear message would make a huge difference in both raising awareness and making it clear what businesses need to do.
Highlighting the size of the problem ahead of the last deadline, was a survey conducted by Stripe which found that 3 in 5 small businesses said they were unfamiliar with SCA. These sorts of numbers should concern all of us working in the financial sector, as it really underlines how unprepared we were last time around and how much work there is to do in raising awareness.
This is in stark contrast to the case of GDPR. Back in 2018 when it launched, organisations from across the board had many questions, but were at least aware of the change and the steps they needed to take. The same simply cannot be said for SCA, yet the disruption it could cause if handled badly is on a similar scale.
What’s more is that any awareness campaign equally needs to focus on consumers as well as businesses. The first time that a customer makes a purchase online and gets declined due to SCA checks will undoubtedly cause confusion and annoyance if they are unaware of what is happening. By running a consumer-facing campaign about SCA, what it means, why it is being done and what consumers will need to do will go a long way in helping. Having educated consumers and businesses will make the transition to SCA much easier, which can only be a good thing given the generally accepted opinion that extra payment security is a good thing.
Having the right resources in place
However, while having an industry-wide awareness campaign will help, customers and businesses alike are likely to have questions and concerns during its initial roll out. This will unquestionably lead to an increase in the volume of calls and questions that contract centres receive. Financial institutions must preempt this rise in customer enquiries and ensure they have skilled customer support teams in place.
Needing to scale up and down with customer demands, financial service businesses should look towards the business process outsourcing (BPO) sector to provide the short term increase in team size that they need. This will help ensure they can cope with an influx of customer enquiries but also guarantee that it would not come at the detriment of their everyday customer service operations.
A focus for everyone
While the financial services industry needs to step up, enabling businesses to do the same, it is not just down to them. In fact, the government and the FCA also need to play an important role in ensuring the UK as a whole is ready for SCA in March 2021. There needs to be a GDPR-like approach to informing the public, including through TV adverts and emails.
If anything, the delay to its introduction should be used as an opportunity for improvement. Now there is a chance to vastly enhance our approach and preparation for SCA, it’s a matter of seeing who is willing to put the effort in now – and who will experience bad repercussions in early 2021.