The PPI scandal in the UK – which saw banks having to pay large fines for mis-sold Payment Protection Insurance (PPI) – has cost the banking sector dear in the last few years. Lloyds Banking Group alone has taken a hit of a reported £18bn since 2011.
In many of these cases, customers would have agreed in principle to these charges. However, in Lloyds’ case it has been difficult for them to prove that they a) properly explained the purpose of the payment protection insurance and the associated costs, and b) that each customer had understood what they had signed up for.
This is due to a lack of documented evidence, and it’s something that banks are desperately keen to make sure doesn’t happen again.
Video technology is the solution
The growing use of video offers financial organisations the means to capture such evidence. Lloyds Bank and Halifax customers can now receive face-to-face advice via video link. Nationwide Building Society also offers video-based mortgage consultations. Barclays Bank has had a 24-hour video banking service that enables customers to receive face-to-face service from anywhere for over four years. If banks are smart about this, the benefits of using video in these customer-facing scenarios could extend beyond improving the customer experience. It could also be used for compliance.
At the moment, banks are under enormous pressure to properly monitor and track discussions and recommendations made to customers, but under current regulations like MiFID II they’re still only required to make notes to record what was said. But will a written record of a conversation truly hold up in court if a claim is made against a bank? How can it be proved that what was documented is what was really discussed and agreed with the customer? The scenario is filled with reasonable doubt, leaving banks and financial organisations at risk of losing out, and paying out.
If video technology continues to grow – with some predictions estimating that it will be used by as many as 80% of banks soon – then it could become the best way for banks to provide more definitive evidence of the process they have gone through during a consultation or the closing of a sale. There will no longer be a reliance on taking written notes. No way for false claimants to say that they had a vulnerability that didn’t exist. And a reduction of claims by customers that they were pushed towards certain products without an appropriate amount of time being spent on understanding their options.
The technology needed to facilitate this change
To make video a tool that helps to manage compliance, financial organisations will first have to improve the way they manage and archive all their video content. This will mean working out how to tag, store, search for and retrieve the videos whenever they need them. Currently, this is a capability that most banks don’t have.
It’s something they must consider, though, in order to maintain compliance and avoid falling foul of evolving regulation requirements. Many financial institutions globally are concerned about the General Data Protection Regulation (GDPR), for example. Under the GDPR, which comes into effect 25th May 2018, individuals are given more rights and control around the use of their personal data. Video footage that can be used to identify someone is likely to fall under the definition of “personal data”, so this creates the scenario where customers can demand to see all the data the bank stores on them, including video.
We have to remember that we’re talking about this against the context of a situation where the world’s top 20 banks were hit with conduct charges that totalled £264 billion between 2012 and 2016, an increase of nearly a third compared to 2008-2012. Their concerns are very real, and they have to keep their eye on the changing ways they communicate in order to avoid future scandals on the scale of PPI.
Financial institutions are going to need a Media Asset Management solution to store, tag, search and retrieve all video they use to do business.
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Access and download our latest report, exploring the value of utilising video in banking and finance. Learn how leading financial institutions are using video to revolutionise compliance processes and drive better customer experiences.