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Certificate in Retail and Digital Banking (Cert RDB) > 14. Customer Communication in a Digital Age > Flashcards

14. Customer Communication in a Digital Age Flashcards

1
Q

How do Fintechs and financial institutions work together to keep up with changes in customer expectations regarding technology?

A

Sometimes, fintechs take products & services that incumbents are already offering and they redesign them for mobile (e.g. Monzo, Tidebank, Revolut)

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2
Q

What proportion of the UK claims to not trust challenger banks at all?

A

two fifths of people

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3
Q

True or false - more than half of the UK are worried that technology will put their data at risk

A

True

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4
Q

What percentage of people are predicted to be using mobile banking apps by 2024?

A

71%

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5
Q

Overall, do people tend to prefer mobile banking apps or online banking?

A

Mobile banking apps

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6
Q

Which age group prefers apps most?

A

Age 18-24

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7
Q

True or false - Banks should allow people to opt in to digital services of their own accord. They should not actively encourage people to go digital.

A

False - banks should encourage those more reluctant and are doing so, e.g. shorter branch opening hours etc.

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8
Q

True or false - Digitisation is about creating new cutting edge mobile and online experiences?

A

False. It is about gaining customer satisfaction across all available channels (omnichannel) .

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9
Q

How can banks establish an effective stream of communication with customers? (3)

A
  1. Establishing TRUST
  2. Creating a SEAMLESS EXPERIENCE
  3. IDENTIFYING NEEDS AND CONCERNS
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10
Q

Which age group is gaining trust especially relevant for when implementing digital channels? Why?

A

55+

33% believe they are more likely to become a victim of fraud via digital channels.

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11
Q

What are examples of rating aggregators?

A

Trustpilot/Tripadvisor

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12
Q

What are the four main uses of social media in banking?

A
  1. MARKETING tool
  2. As a COMMUNCATION CHANNEL
  3. Channel for FEEDBACK AND REACTION
  4. For TRANSACTIONAL SOCIAL BANKING
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13
Q

What are the main repercussions of social media interactions being mishandled by banks? (2)

A
  1. Can go viral because they are so public
  2. Can get a fine if unregulated advice is given without due dilligence
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14
Q

How can data be used to better understand customers? (3)

A
  1. Easier to SEGMENT a target market
  2. Discover TRENDS in BUYING BEHAVIOUR
  3. CUSTOMISATION of individual communication strategies
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15
Q

What is meant by “Signals”

A

Small sets of relevant data that can impact business

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16
Q

What is meant by “noise”

A

Irrelevant data

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17
Q

What are the types of data that switch on “signals” and lead to successful communication? (3)

A
  1. First party data
  2. Second party data
  3. Third party data
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18
Q

What is First Party data?

A

Data collected by a BANK as part of its marketing, sales, services and operations.

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19
Q

What is Second Party data?

A

Data collected by PARTNERS and that they are willing to share with banks.

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20
Q

What is Third Party data?

A

Data that is PURCHASED from DATA AGGREGATORS

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21
Q

A bank purchases some information on demographics and geographics. What type of data is this?

A

Third Party

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22
Q

A bank collected data when opening accounts, when customers make transactions and when customers act with the bank digitally. What type of data is this?

A

First Party

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23
Q

Twitter shares ad impressions with a bank after they post an advert. What type of data is this?

A

Second Party

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24
Q

What percentage of finance executives admit to being ineffective at delivering optimised digital customer experiences across all touchpoints?

What are the consequences of this? (2)

A

70%

Leads to
1. Increased costs
2. Increased customer churn

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25
Q

_______% of sales are said to come from ________% of existing customers

A

80% of sales from 20% of existing customers.

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26
Q

How does US Bank effectively use data to increase revenue and Customer Lifetime Value (CLV)?

A

Collects data from millions of touchpoints and uses this for targeted sales to customers.

If a customer gets married, has a baby or gets a new job, the bank collects this data and uses it to sell relevant products.

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27
Q

What are the Ten Rules for Communicating Effectively Online (according the the LIBF textbook?)

A
  1. Stay COMPLIANT
  2. LISTEN to customers (consider their wants and needs)
  3. PAY ATTENTION TO DETAIL
  4. Be PATIENT
  5. Take account of customers IDEAS and POINT OF VIEW
  6. Be EMPATHETIC
  7. Be PROACTIVE & POSITIVE
  8. Act in a FINANCIALLY INCLUSIVE manner
    (think about those less knowledgeable/experienced)
  9. Be HONEST
  10. Be OPEN & PERCEPTIVE to FEEDBACK

THINK: CHAP FLOP PE

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28
Q

How can we pay attention to detail when communicating with customers online?

A

Pay attention to written tone and choice of words. You don’t have any physical cues, so you can rely on this to tell you whether the customer is interested in what you are saying and whether they are comfortable with the use of jargon.

29
Q

What are the FCA’s Principles for Business? (11)

A
  1. INTEGRITY
  2. SKILL, CARE & DILLIGENCE
  3. MANAGEMENT & CONTROL
  4. FINANCIAL PRUDENCE
  5. MARKET CONDUCT
  6. CUSTOMERS INTERESTS
  7. COMMUNCATION WITH CLIENTS
  8. CONFLICTS OF INTEREST
  9. CUSTOMERS: RELATIONSHIPS OF TRUST
  10. CLIENT’S ASSETS
  11. RELATIONS WITH REGULATORS
30
Q

What is included in the FCA’s Principle for Business relating to:

  1. Management and Control (2)
A

Firms must
1. Organise its affairs responsibly/effectively
2. Have adequate risk management systems

31
Q

What is included in the FCA’s Principle for Business relating to:

  1. Financial Providence
A

Firms must maintain adequate financial resources

32
Q

What is included in the FCA’s Principle for Business relating to:

  1. Communication with clients (2)
A

Firms must:
1. Pay due regards to the customers’ information needs
2. Communication should be clear, fair and not misleading

33
Q

What is included in the FCA’s Principle for Business relating to:

  1. Customers: Relationships of Trust
A

Making sure advice is suitable

34
Q

What is included in the FCA’s Principle for Business relating to:

  1. Clients Assets
A

When firm is responsible for client assets, adequate protection must be in place to cover these.

35
Q

What is included in the FCA’s Principle for Business relating to:

  1. Relations with Regulators (2)
A

Be open and co-operative.
Disclose anything which regulator would normally expect notice of.

36
Q

True or false - a firm does not need to put things right to a customer unless they make a complaint?

A

False. Customers may want an APOLOGY or ASSURANCE that the mistake will not happen again.

37
Q

True or false - an apology requires an admission of guilt?

A

False. It require the firm to demonstrate that they believe the customer to be important and that they understand what the customer wants

38
Q

According to the FCA, do all complaints need to be written?

A

No, complaints can be oral or written

39
Q

What is the FCA definition of a complaint?

A

An expression of DISATISFACTION which alleges that the complainant either HAS OR WILL SUFFER:

  1. FINANCIAL LOSS
  2. MATERIAL DISTRESS
  3. MATERIAL INCONVENIENCE
40
Q

How is it decided whether distress or inconvenience is ‘material’?

A

The Financial Ombudsman service can look into this. The FCA does not provide a definition.

41
Q

What must firms do with regards to their complaints policies and procedures? (5)

A
  1. Have APPROPRIATE procedures in place
  2. Procedures should be PUBLISHED & MADE AVAILABLE to customers both when they buy a product and ask to make a complaint
  3. DISPLAY A NOTICE stating that complaints can be referred to FOS
  4. Complaints LITERATURE should be AVAILABLE and written in PLAIN, CLEAR LANGUAGE
  5. IDENTIFY A SENIOR INDIVIDUAL who has OVERALL RESPONSIBILITY for complaints handling.
42
Q

What rules are in place with regards to Telephone complaints?

A

The complainant should not have to pay more than a basic rate to contact the firm, i,e premium rate lines should not be used

43
Q

What sort of person can deal with a complaint? (3)

A
  1. Someone who is competent to do so
  2. Someone who was not involved in the event in question
  3. Someone who has the authority to settle complaints
44
Q

What is the time limit for customers wanting to submit complaints?

A

Either 6 years after the event
or
3 years from when the complainant became (or should have become) aware that there was a cause for complaint.
(Whichever is later)

45
Q

How should firms acknowledge receipt of a complaint? When must acknowledgement be issued? What information should be included within this acknowledgement?

A

Acknowledgement of receipt should be WRITTEN.
This should be issued PROMPTLY after the complaint has been received.
Should be accompanied by a SUMMARY OF THE FIRM’S COMPLAINTS PROCEDURE.

46
Q

How long does a firm have to resolve the issue after a complaint has been submitted? What needs to be done to show the issue has been resolved?

A

8 weeks after receipt of the complaint. A FINAL RESPONSE letter needs to be sent to the customer (this explains what actions were taken to investigate and how the conclusion was reached)

47
Q

What should firms do if they are unable to resolve a complaint within the appropriate amount of weeks? (4)

A
  1. Provide a REASON for the delay
  2. Provide an ESTIMATE TIMESCALE for the issues to be resolved
  3. EXPLAIN their RIGHT TO REFER TO FOS if dissatisfied
  4. Include a copy of the FOS leaflet
48
Q

If a complaint is resolved Informally within 3 business days of receipt, how should a bank’s complaints procure differ?

A
  1. No need to provide a FINAL RESOLUTION
  2. Must instead provide the customer with a COMPLAINT RESOLUTION LETTER which says that the matter has been RESOLVED & CUSTOMER HAS RIGHT TO REFER TO FOS
49
Q

How long does a customer have to refer their complaint to the Financial Ombudsman Services (FOS) if they are dissatisfied with the outcome?

A

6 months

50
Q

How long must records be kept for the following types of complaints:
1. Those relating to collective portfolio management services or an EEA UCITS scheme
2. Other complaints
3. Those relating to MiFID Business

A
  1. 5 years
  2. 3 years
  3. No minimum period
51
Q

How often must a firm report to the FCA regarding complaints received?

A

Every 6 months

52
Q

Complaints regarding phone wait times and staff rudeness are not regulated. What should firms do with regards to unregulated complaints?

A

Apologise & deal with on an individual basis, but no need to stick to FCA rules

53
Q

What rights does an employee have if a complaint is submitted against them specifically as a person and not the firm? (2)

A
  1. must be allowed to give their recollections of their advice and the reasoning behind it
  2. must be given a chance to provide evidence & explain any points that may not be clear on any documentation given as evidence.
54
Q

When was online banking introduced?

A

1980 United American Bank - first to offer online banking globally for a fee
1996 OP Group (Finland) becomes 2nd in world and first in EU

55
Q

When was telephone banking established in the UK?

A

1984 (think George Orwell)

56
Q

What is trolling? Who can be trolled?

A

a form of baiting online which involves sending abusive hurtful comments across social media platforms. Both individuals and firms can be trolled.

57
Q

Is trolling illegal?

A

Yes, it is a cybercrime and someone can be prosecuted for this under the MALICIOUS COMMUNICATIONS ACT 1988

58
Q

What are the possible consequences for firms who have been trolled? (4)

A
  1. Tarnished brand & REPUTATION
  2. HARDER TO ATTRACT/RETAIN CUSTOMERS
  3. HARDER TO FIND FUNDING
  4. HARDER TO ATTRACT/RETAIN GOOD STAFF
59
Q

How can people use complaints to troll banks?

A

If a bank has offered to resolve a complaint and the customer is still unhappy & unwilling to accept this, then they may be a troll and not actually want the problem solved as they want to cause damage to the bank.

60
Q

What is the best method to identify whether online trolling is damaging the company’s brand?

A

Monitor Social Media

61
Q

What patterns of abuse can we use to identify trolls? (3)

A
  1. LANGUAGE
    - sometimes people are paid to post negative reviews. They will use the same language.
  2. FAKE ACCOUNTS
    - Is the account very new?
    - Does it look dodgy?
    - Is the account only used to post abuse?
  3. FREQUENCY OF POSTS
    - how often are they posting abuse to the firm?
62
Q

What should you do if you identify trolling?

A

Comply with the firm’s policies, remain polite/professional & report the trolling internally

63
Q

Do social media companies hold any responsibility for trolling?

A

Remember that it is just a platform, you can’t rely on the social media company to control trolling. This should be dealt with within the firm.

You do have the right to report trolling posts, but they could take ages to be taken down and reputation would already have been damaged.

It is also difficult for Social media companies to determine what is trolling and what is a complaint, so may not be taken down at all.

64
Q

What types of content has been banned by Google? (6)

A
  1. DANGEROUS/DERROGATORY
  2. SEXUALLY EXPLICIT
  3. TERRORIST RELATED
  4. ILLEGAL (e.g. infringing copyright)
  5. CONFLICTS OF INTEREST (e.g. competitors trying to manipulate the profile/account).
  6. IMPERSONATION
65
Q

Can financial institutions be trolls?

A

Yes, but there are not many examples of this.

66
Q

Can a bank chasing customers for payments constitute as trolling?

A

No, under the MALLICIOUS COMMUNICATIONS ACT 1988 it is not an offence if the threat was USED TO ENFORCE A DEMAND MADE ON REASONABLE GROUNDS.

67
Q

What constitutes as an offence under the Malicious Communications Act 1988?

A

A LETTER, ELECTRONIC COMMUNICATION or ARTICLE which conveys:

  1. INDECENT OR GROSSLY OFFENSIVE MESSAGES
  2. a THREAT
  3. Information that is FALSE/KNOWN TO BE FALSE by the sender
  4. INTENDED TO CAUSE STRESS/ANXIETY

Not an offence if the threat was USED TO ENFORCE A DEMAND MADE ON REASONABLE GROUNDS.

68
Q

Does the recipient need to receive a piece of communication for it to be considered an offence under the Malicious Communications Act?

A

No, doesn’t matter whether it is received, still counts if it was sent

69
Q

Can you use not knowing that the communication was illegal under the Malicious Communications Act as a defence in court?

A

No

Certificate in Retail and Digital Banking (Cert RDB) (23 decks)

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