The Hayne Royal Commission has seen a shift in activity amongst a variety of regulators in Australia. This is for two reasons.Firstly, the commission shone a spotlight on the dodgy practices and compliance issues within banks for all to see. Consumers, regulators and politicians alike received a front-row seat to Hayne’s forensic dissection of the banking, insurance and wealth industries. 

For many, it was unfathomable that banks and financial institutions were able to get away with so much misconduct for so long. This has led to many to question other industries and sectors, with trust in business taking a hit, following the reputation of some of our oldest and most trusted financial institutions going down the pan. 

Secondly, the Royal Commission highlighted the lack of enforcement of regulations in the banking sector, with financial institutions regularly receiving no more than a slap on the wrist for compliance breaches by regulators. 

This has led to regulators getting a proverbial kick-up the backside, whilst being given more power to enforce compliance. And, it’s not just in the financial sector this is happening. Across the board, from the Fair Work Ombudsman to the Australian Competition and Consumer Commission (ACCC), regulators are starting to up the ante against misconduct and compliance breaches.

A prime example of this is the recent news the ACCC has launched legal action against Medibank Private’s budget brand AHM over a compliance breach, where it rejected insurance claims that should have been paid.

Whilst AHM did the right thing and self-reported the breach and has already begun remediating customers, the ACCC isn’t going to go easy on the brand, with ACCC Chair Rod Sims looking to use the legal proceedings to send a message to other firms to “check your systems”. Where self-reporting might have once been a way to limit the punishment from regulators, times have changed.

It is likely we will increasingly see regulators not only pursue self-reported issues but also make a statement with companies they catch red-handed. If compliance is not taken seriously, businesses will quickly see their legal costs spiral out of control, whilst their reputation is dragged through the mud.

It’s not just the regulators putting companies to the sword

Interestingly, the recent case against AHM also brought to the fore another issue for businesses when tackling a compliance breach – how to inform customers and identify those in need of remediation.

The challenge for businesses who identify compliance issues is the fact that it is extremely difficult to find the affected customers. Businesses would have to trawl through hundreds if not thousands of call recordings, online messages and emails, grinding the remediation process to a halt. Not only would this take an enormous amount of resources to manually go through these interactions but the costs would also be astronomical for business – probably more than the total remediation costs.

So, as with the AHM case, alerting all your customers is a quicker, more cost-effective and efficient way to identify the typically small number of customers impacted. But, it also means customers have to ‘self-serve’ and identify whether they are eligible for compensation themselves.

In an era where brands are beginning to live and die by the customer experience, this is definitely a hard pill for many of their customers to swallow and is also a reputational nightmare for brands. 

Don’t look for shortcuts but bring in the bots

We shouldn’t be looking for shortcuts when it comes to compliance. Today, Artificial Intelligence (AI), automation and intelligent analytics can streamline compliance activity by trawling through all customer communications across all channels to identify and flag issues. This could help businesses quickly identify the small pockets of customers impacted in record time and proactively remediate customers.

Furthermore, this technology can conduct this analysis in real-time, whilst your operatives are communicating with your customers, and flag potential compliance risks as they arise. It essentially acts as a ‘Compliance-as-a-Service’ offering, ensuring your interactions with customers – whether online or offline – meet the regulatory standards in real-time. Even if the conversation enters a grey area, smart AI can flag these potential issues for compliance or risk officers for further review.

This proactive approach to compliance shouldn’t be an afterthought or a solution you put in place once an issue has been raised. It should be the foundations of businesses compliance efforts to ensure the customer experience is the best it can be. At the end of the day, they are paying good money for a service and that service should be exactly what they expect.

Not only would a proactive approach help avoid the expensive legal processes and the need to self-report to regulators and all your customers, but it reduces the risk of getting into the situation in the first place, protecting your reputation, customer trust and your bottom line. 

Compliance is no longer just red tape, it is the foundation of a good customer experience and the very least we should expect from businesses.