Fair play. Fairness is important to the British. Fair play is a thread that runs through our culture and the Labour Party currently finds it compelling enough to base an election campaign slogan on it. In financial services we now have an obligation to treat customers fairly. So what does that mean in terms of consumers’ expectations?
Most customers will not have a detailed idea of how they expect companies to behave, so it is fair to assume that they base their experience and ideas of fairness on how an individual should treat them. This will begin with common courtesy and extend to getting a fair hearing and being treated with respect if they have a problem or complaint. The efficiency of an organisation in looking after them will also be an indicator of how much they are valued.
A lot of this ground can be covered by companies through good structure and training and I know from my own experience that some have made great progress. But there is also a knottier, underlying issue, which I think is dealt with more reluctantly. How well is the customer being treated in the small print of the products that they are buying? If we look at the personal finance problem pages, they suggest that there are still many consumers who are receiving surprises that they regard as neither welcome nor fair. Whether it is the return on endowments, exit penalties from investment funds or exclusions in general insurance policies, they feel that they have not bought what they thought and not got the value that they expected.
This is a much tougher issue, because it goes to the heart of companies’ business models. Will they be prepared to forego some of their profit and their risk management, in the name of transparency? The demands of consumerists, regulators and Government suggest that in the medium term they won’t have any choice, but it will be interesting to see who makes the changes willingly and who resists for as long as they can. The approach of new entrants, such as Metro and Virgin in the banking market, will offer interesting pointers as to what they think consumers now find acceptable.
Those who choose to change as late as possible will get away with it for a few years and will no doubt make money. But it will become harder to put a marketing gloss on what they are doing. Even they should be thinking about the changes that they will eventually have to make.
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