Editorial & Advertiser Disclosure Global Banking And Finance Review is an independent publisher which offers News, information, Analysis, Opinion, Press Releases, Reviews, Research reports covering various economies, industries, products, services and companies. The content available on globalbankingandfinance.com is sourced by a mixture of different methods which is not limited to content produced and supplied by various staff writers, journalists, freelancers, individuals, organizations, companies, PR agencies Sponsored Posts etc. The information available on this website is purely for educational and informational purposes only. We cannot guarantee the accuracy or applicability of any of the information provided at globalbankingandfinance.com with respect to your individual or personal circumstances. Please seek professional advice from a qualified professional before making any financial decisions. Globalbankingandfinance.com also links to various third party websites and we cannot guarantee the accuracy or applicability of the information provided by third party websites. Links from various articles on our site to third party websites are a mixture of non-sponsored links and sponsored links. Only a very small fraction of the links which point to external websites are affiliate links. Some of the links which you may click on our website may link to various products and services from our partners who may compensate us if you buy a service or product or fill a form or install an app. This will not incur additional cost to you. A very few articles on our website are sponsored posts or paid advertorials. These are marked as sponsored posts at the bottom of each post. For avoidance of any doubts and to make it easier for you to differentiate sponsored or non-sponsored articles or links, you may consider all articles on our site or all links to external websites as sponsored . Please note that some of the services or products which we talk about carry a high level of risk and may not be suitable for everyone. These may be complex services or products and we request the readers to consider this purely from an educational standpoint. The information provided on this website is general in nature. Global Banking & Finance Review expressly disclaims any liability without any limitation which may arise directly or indirectly from the use of such information.

Managing claims, effectively

“Managing claims, effectively by Andy Evans, Xactium CEO

The latest issue to hit the financial services sector is the alleged mis-selling of Payment Protection Insurance (PPI), a scheme provided to help the insured cover payment costs if they have been injured or made redundant. Consequently there has been a huge growth in the number of Claims Management companies acting on behalf of consumers in claims processes, whose ‘hard-sell’ tactics have come into question. This piece looks beyond the reporting of an incident of mis-sold insurance and discusses how banks and regulators can resolve these claims effectively.Andy

Firstly, there is a high volume of claims for the regulator to handle; over 500,000 claims have been referred to the UK Financial Ombudsman Service. It was recently reported that the regulator was receiving in excess of 400 calls per hour, with each of these claims needing to be managed to resolution. Contacting the regulator is only one method for consumers to place a claim so imagine how many more calls have been dealt with by the banks themselves?

The sheer scale of incoming calls means additional pressure on claims departments and resources. Staff will be working to full capacity, highlighting the importance of an efficient and consistent claims handling process. Ensuring the process is supported by clear procedures and the necessary claims infrastructure is essential to minimise the likelihood of errors or delays. The volume of calls results in a mass of information that needs to be organized and shared with colleagues working on the same claims. Maintaining a good level of customer service, consistent communication with third-parties and providing an audit trail is a challenge. How could technology help with this set of challenges?

Cloud computing is a solution businesses should consider when looking to manage claims effectively. Using the regulator as an example, a cloud solution provides a reference point for the claims process where all the details of the claim are documented. Unlike many traditional solutions, a cloud-based claims handling solution is ideally equipped to manage a sudden influx of data. Using the cloud, any users drafted in to help manage the additional claims can be added to the cloud solution and removed after the critical period has passed. Flexibility of the cloud ensures the ease of implementation as the claims handlers would still be able to utilise data stored in traditional systems, saving time and cost for the company.

Web browser dashboards, where the layout and design is similar to popular social media websites, help staff to rapidly familiarise themselves with the system and find the information they need. Claims workflows support the flow of claims information, ensuring approval processes are in place and relevant claims information is completed. Management oversight for team leaders can be gathered through custom MI reports and supported by user hierarchies to ensure the claims lifecycle is efficiently managed.

Experts estimate that resolving PPI claims could cost the financial services industry £15 billion, however this figure could increase further if claims processes are not clearly defined or adhered to. Leveraging claims data collected for trend analysis and ensuring alignment with risk management policies going forward will be a necessity for banks to understand the full impact felt by the business and to prevent a future occurrence.

The focus will now be on how these cases are resolved. A number of banks have taken a proactive step by making substantial financial provisions for the resolution of these claims. This issue presents another obstacle to be overcome as banks seek to steer the economy away from the financial crisis. Looking to the future, organisations who were involved in the mis-selling of PPI should consider how their wider governance practices can help them to avoid similar pitfalls in the future.

As regulators and reports both urge banks to proactively manage their Governance, Risk and Compliance (GRC) activities, now is the time for banks to be getting their affairs in order. Banks should reflect on whether risk is adequately represented on the Board, with management to lead on improving knowledge-sharing and risk discovery.

The PPI issue can be seen as a multi-billion pound incentive to embed transparent, fair practices for financial selling. With the average compensation payout costing £2,750, this is a wake-up call for leaders in the financial services to ensure their staff understand and comply with ethical selling policies. In short, there is more than meets the eye when it comes to dealing with claims compensation. Pointing fingers to a huge, seemingly incomprehensible volume of data is not going to be an acceptable course of action when customers demand their answers fast.