Connect with us

Global Banking and Finance Review is an online platform offering news, analysis, and opinion on the latest trends, developments, and innovations in the banking and finance industry worldwide. The platform covers a diverse range of topics, including banking, insurance, investment, wealth management, fintech, and regulatory issues. The website publishes news, press releases, opinion and advertorials on various financial organizations, products and services which are commissioned from various Companies, Organizations, PR agencies, Bloggers etc. These commissioned articles are commercial in nature. This is not to be considered as financial advice and should be considered only for information purposes. It does not reflect the views or opinion of our website and is not to be considered an endorsement or a recommendation. We cannot guarantee the accuracy or applicability of any information provided with respect to your individual or personal circumstances. Please seek Professional advice from a qualified professional before making any financial decisions. We link to various third-party websites, affiliate sales networks, and to our advertising partners websites. When you view or click on certain links available on our articles, our partners may compensate us for displaying the content to you or make a purchase or fill a form. This will not incur any additional charges to you. To make things simpler for you to identity or distinguish advertised or sponsored articles or links, you may consider all articles or links hosted on our site as a commercial article placement. We will not be responsible for any loss you may suffer as a result of any omission or inaccuracy on the website. .


Customer input is key to ending banks’ discrimination

iStock 1208672788 - Global Banking | Finance

When faced with problematic issues, banks often begin addressing concerns at the policy- and product-level. Now, it’s time to begin at the customer-level.

With the Consumer Financial Protection Bureau officially stating that discrimination in any financial product is illegal, banks will need to prioritize pinpointing customer frictions when using their products. Understanding their customers’ concerns starts with exploring customer narratives and identifying the problems they share in their complaints.

Customers tell their banks about the frictions they experience, and customer complaints provide a window into consumers’ perspectives. As stated in the CFPB’s Consumer Laws and Regulations about UDAAP, “Even a single substantive complaint may raise serious concerns that would warrant further review. Complaints that allege, for example, misleading or false statements, or missing disclosure information, may indicate possible unfair, deceptive, or abusive acts or practices needing review.”

Yet, today, banks do not fully leverage customer conversations. As a data source, customer narratives are messy and require new technologies and analytic capabilities. All too often, severe complaints are not escalated, and they are disregarded as outliers, rather than leading indicators.

As banks prepare for their investigations and supervisory exams, including fair lending, fair treatment, and equity, their customers’ narratives can lead them to the specific practices, operational issues, or communication vehicles which explicitly or implicitly suggest discrimination.

In fact, using technology that’s fueled by a decade of CFPB customer narratives, we have found that anywhere between 2-5% of complaints suggest perceived discrimination. Isolating these customer complaints begins the process of addressing the policies and practices that require review.

Using natural language processing and machine learning techniques – which can be leveraged in positive ways, customer narratives that suggest discrimination can be identified based on the protected classes defined by the Fair Credit Reporting Act.

One example worth considering is customer complaints about payment terms. If banks review their policies without customer input, they may not see how the payment terms negatively impact certain groups of customers. That’s why dissecting customers’ words about payment terms is critical.

Banks tend to prepare for their safety and soundness investigations at the product and policy level. Given the multitude of methods used to enforce interdependent policies, this approach can be time consuming and labor intensive – and won’t work for weeding out discrimination.

Customer input is key for efficiently and effectively identifying discrimination – and preventing it from rearing its ugly head. For banks to avoid the CFPB’s expansive new punishment for discrimination, one thing is certain: they need to start listening to their customers.

Marcia Tal is the CEO of Tal Solutions® and the Founder of PositivityTech®: The Science of Transforming Negatives to Positives®. She is also a former Citigroup Executive Vice President of Decision Management.

Global Banking & Finance Review


Why waste money on news and opinions when you can access them for free?

Take advantage of our newsletter subscription and stay informed on the go!

By submitting this form, you are consenting to receive marketing emails from: Global Banking & Finance Review │ Banking │ Finance │ Technology. You can revoke your consent to receive emails at any time by using the SafeUnsubscribe® link, found at the bottom of every email. Emails are serviced by Constant Contact

Recent Post