With more Consumer Duty standards effective from the end of July, regulatory compliance is paramount.
Both advisers and large financial firms need a robust approach to data management and client engagement to meet these standards.
Advanced identity verification solutions are essential in this transition, offering technology that streamlines compliance efforts and enhances client trust.
Let’s remind ourselves of some of the key issues in Consumer Duty compliance:
- Accurate data management: Ensuring client data is current and accurate.
- Client re-engagement: Efficiently reconnecting with ‘gone away’ clients.
- Regulatory documentation: Maintaining thorough records of compliance efforts.
- Integration with CRM systems: Seamlessly incorporating new solutions into existing workflows.
Consumer Duty regulations ensure financial services firms act in clients’ best interests, providing suitable products and high standards of care. Firms must prioritise customer outcomes, making accurate data and effective client engagement strategies essential.
Advanced identity verification solutions use the latest digital technology to validate identities and confirm client information quickly and securely.
Key features include:
- Accurate data extraction: Handling various ID documents and extracting data using optical character recognition and near-field communication technologies.
- Document authenticity checks: Combining automatic and manual processes to verify ID document authenticity.
- Liveness detection: Anti-spoofing tests confirming the image is of a real person.
- Face matching: Comparing the user’s face scan with their ID document photo.
Maintaining accurate client data is crucial for compliance and communication. Advanced identity verification ensures data accuracy by verifying document authenticity and client identities, reducing errors and fraud.
Tracing gone aways
Reconnecting with ‘gone away’ clients is essential for Consumer Duty compliance. Advanced identity verification tools can help advisers locate and re-engage clients by updating contact information and verifying identities. This ensures timely and relevant communication, enhancing the client experience.
Supporting regulatory reviews
Preparing for regulatory reviews requires comprehensive documentation of compliance efforts. Advanced identity verification solutions help firms maintain thorough records, demonstrating alignment with Consumer Duty principles.
This documentation is crucial for regulatory audits and showcases a firm’s commitment to customer care.
There are many other practical benefits for advisers and firms:
- Time efficiency: Quick online verification saves time for advisers and clients.
- Cost-effectiveness: Automating verification reduces manual checks and operational costs.
- Enhanced client trust: Secure verification builds client trust and loyalty.
- Scalability: Solutions suitable for both independent advisers and large firms.
Stuart Erskine is a director at Flat Mountain Consultancy
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