Managing Disclosure Changes Across Products, Geographies and Channels

Each time a financial services company offers a customer a product it must disclose everything from fees, interest rates, purchase options and minimum balance requirements as well as potential risks. These disclosures must be clear and consistent throughout the purchase process, and across every touchpoint from a physical office to a Web site to even a phone call.

As public officials and regulators increase their oversight of the industry, the cost –financial and otherwise – of noncompliance is rising. In recent months, three large banks have been fined for disclosure failures. The largest was a 23.9 million-pound (30.9 million USD) fine against a large financial insurance company by the UK Financial Conduct Authority for not telling customers that they had the right to shop for options when purchasing annuities.

Managing disclosures becomes more challenging with each new product an organization offers in each new market. For example, one bank may offer multiple credit cards, each with its own terms, charges, and benefits that may differ across geographies as well as for versions of the same card, such as a standard versus a promotional offer.

Additionally, two factors new to the equation are making disclosure compliance even more complex. The first is that regulators, in response to increasing concerns about customer protection, are changing their disclosure requirements more often. The second is that customers who might formerly have interacted with a company through only one channel (a paper application in a physical office) now might choose to communicate over multiple channels. All of this is requiring financial institutions to spend time and money to make updates across what can be a complex mixture of products, communications, and channels.

Too many changes, too much delay, results in too much risk

Organizations often maintain different teams to create, edit and manage the disclosures on different document templates for every variation of every product and different distribution systems for each communication channel. This is a recipe not only for manual errors but for delays in making changes to a disclosure simultaneously across every channel. Organizations report a single change cycle can take a minimum of six weeks and require hundreds of tedious, manual, repetitive revisions across the hundreds of communications materials that support each product.

All this extra work not only drives up costs but increases the risk of both regulatory fines and of damage to the organization’s brand if it is found negligent in disclosure. The need to fix the problem and notify customers can mean more cost and harmful publicity. All these outcomes are unacceptable when margins are under pressure in a low-interest rate environment, and established players are facing threats from new digital competitors.

Automating disclosure management in Customer Communications

There is a better way: Modernizing and automating the disclosure process to replace duplicate, error-prone manual processes with streamlined, automated workflows that cut cost, time, and risk. However, for such a transformation to be successful, the move requires the following considerations:

• The creation of common disclosure templates and language to reduce the number of touchpoints required to accommodate local differences in branding and terminology.
• A centralized content hub for managing disclosures and associated customer communication materials to reduce the risk of errors and unauthorized changes in disclosure content.
• A platform that manages disclosure documents as shared objects, applying authorized changes automatically and quickly to all disclosure language across all business units, geographies and communication channels. Managing digital and print updates within a single file makes it easy for all the stakeholders to speed the proper disclosures to market.
• The ability to give business users fast and easy control over authoring and editing disclosures, so they can quickly make required changes without waiting for help from IT.
• Customizable approval workflows that match your business processes and reduce the need for retraining.
• A workflow approval process that allows business users to instantly proof changes they’ve made across channels. This eliminates the delay of coordinating changes with IT, gives content authors full control over the accuracy of their updates and ensures consistency across communications.

Faster, more accurate disclosure compliance

With the proper tools and streamlined processes, financial services providers have eliminated 70 percent of the steps required to change disclosures and slashed the time required from months to less than one day. While increasing their agility they have also reduced their risk with improved insight into and oversight of the proofing and review cycle and improved their confidence that the right changes were made in an accurate and timely way.

The need to comply with stricter regulatory oversight of disclosures will only grow over time. So will the need to offer more products, in more versions, to more markets. Streamlining your disclosure processes is not only essential to reducing your costs and risks, but to enabling the agility required to compete in an ever more challenging financial services environment.

(Originally published in Corporate Compliance Insights)