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Financial Conduct Authority optimization best practices for CX.

December 19, 2022 By: Kristina Leach

There’s no question that a customer-centric approach to business decisions will give your financial company an edge over the competition. Companies that execute a thoughtful, data-driven customer experience (CX) program can increase sales conversion rates and customer satisfaction by as much as 20%

And it’s through understanding the customer journey that your business will improve the customer experience. That’s why optimizing the journey should be an integral part of your CX strategy.

The question is: how do you improve CX at every touchpoint while adhering to data privacy regulations in your industry?

The Financial Conduct Authority (FCA) directs all financial institutions to ensure data privacy and security by using protection methods such as encryption and restricted access for every customer interaction. Therefore, you’ll need to keep FCA guidelines in mind when creating your customer experience roadmap.

Let’s look at FCA data control and protection guidelines, the FCA-compliant digital experience analytics platform you can use to gain customer insights, and CX optimization best practices, so you have the information you need to implement your customer experience strategy with confidence. 

What is the Financial Conduct Authority?

The Financial Conduct Authority (FCA) is a financial regulatory body established in 2013. It regulates about 50,000 financial institutions in the UK, including banks, wealth management firms, and financial markets.

The FCA’s primary goal is to protect consumers, ensuring that financial institutions don’t exploit or expose their personal data. It directs all financial institutions and firms in the UK to put systems and controls in place to prevent data breaches from occurring. 

The FCA guidelines also ensure data obtained during customer research for customer experience optimization is protected from hackers.

CX data is essential for understanding customer needs and pain points and having the insights necessary to make customer-centric decisions. But, every financial business that uses this data needs to live up to the standards set out by the FCA.

Fortunately, with a digital experience analytics platform that is FCA-compliant through the whole process of data handling, including collection, processing, transit, and storage, you can gain insights that will help your company boost CX without putting your customers’ personal data at risk. 

FCA guidelines on customer data protection.

The FCA identifies four main ways financial institutions can protect customer data.

Financial institutions must:

  1. Have internal procedures to protect data from unauthorized access.
    1. Staff access rights must be reviewed regularly, including when joining the firm, changing positions, and leaving the firm.
    2. Staff with access to a lot of data should also be regularly vetted.
    3. Access to sensitive areas of the business must be controlled.
    4. Data should be disposed of competently via accredited suppliers if the job is outsourced.
  2. Use the appropriate level of data security.
    1. Data should be encrypted during electronic transfers.
    2. Staff should be trained on data security risks.
  3. Ensure that only encrypted devices are used to take customer information offsite.
    1. Third parties must always carry customer information on encrypted devices.
  4. Third parties should only access the data they need.

Five ways to protect and secure data to be FCA-compliant.

The FCA allows financial institutions to choose and implement security measures to guarantee customer data privacy. Your firm should use these methods to protect and secure personal data.

Here are five ways to be FCA-compliant when processing customer data.

  1. Use the most secure encryption algorithms. RSA 2048-bit public/private key encryption, AES256 symmetric key encryption, and forward secrecy TLS session work well together.
  2. An FCA-complaint partner should block the capture of personal data such as CVV2 fields, credit card numbers, and passwords. This method also makes you compliant with European Union General Data Protection Regulation (EU GDPR). The GDPR protects personal data for all European citizens and residents. It applies to every business, even those outside the EU, as long as they deal with European clients.
  3. Third parties may sometimes need personal data to help optimize CX. In this case, they must use pseudonymization, a technique recommended by the GDPR to guarantee data privacy.
  4. Encrypt data in transit and at rest. For example, a forward secrecy SSL/TLS connection is an excellent encryption technique for data in transit.
  5. Restrict access to personal data using Single-Sign-On solutions, for example, SAML 2.0.

Once you’ve guaranteed data protection, you need a continuous flow of data to optimize the customer experience

Best practices to help you optimize CX.

Optimizing the customer experience while keeping data secure can be overwhelming because there are so many areas to address. But, by following tried-and-true best practices and choosing the right digital experience analytics platform to process your data, your CX team can stay focused throughout the customer experience journey.

Here are the five best customer experience optimization practices for mobile apps and other digital customer touchpoints while complying with FCA guidelines.

1. Don’t compromise user experience during in-app surveys.

In-app surveys ask customers about their experience using your digital product. It’s important to take steps to avoid poor customer experience when using in-app surveys, so the survey doesn’t harm CX.

One way to do this is to avoid third-party survey platforms, which create friction in the user experience. Don’t make users visit an external site to take a survey—instead, build the feature into your app, making it easier and more convenient for your customers. 

Also, keep your questions clear and concise for a high response rate. One to two questions generally receive the highest completion rates. The more questions you ask, the lower your completion rates. 

The in-app survey should be placed in the middle of the screen, centered, and with an overlay. The top center is the next best option for ensuring a good user experience. 

2. Let customers engage with customer care agents.

One study found that 95% of consumers don’t want to talk to a robot when they need customer support. 

Customers want a human experience, so your data collection should include human interactions. Hire customer service agents who can be available to your customers while they’re interacting with your digital products.

Customer service agents should establish trust, listen intently, and appropriately respond to customer concerns.

3. Stimulate customer engagement by reaching out through a digital platform.

Sometimes customers don’t want to talk on the phone, and a non-human approach stimulates engagement.

FCA-compliant third-party platforms gain access to data, such as behavior data, when customers interact with your product. You can use this information to stimulate customer engagement using:

  • In-app messages: In-app messages pop up when customers use your digital platform to announce new features or collect feedback.
  • Personalized push notifications: These notifications rely on personal data generated from customer interactions with your product.
  • Rewards: Reward programs improve customer loyalty and engagement. You can give loyal mobile app users access to beta features and then use the information gained from their behavior to improve the product before rolling it out.
  • Reach out to inactive users. Set up a win-back campaign targeting inactive users and luring them with new features or other incentives.

4. Map the customer journey with clarity.

Customer journey mapping is done to understand the sales funnel and optimize every customer touchpoint. A digital analytics experience platform like Quantum Metric improves customer journey management by discovering issues in your digital platform without a customer’s input.

We identify and solve customer experience issues before a client ever notices them. We also observe and understand how new customers interact with your digital product, areas that need improvement, and what features are causing friction.

As a result, you understand where the customer ends the journey, why they end it, and design innovations that will encourage them to complete it. The advantage of having this information is you continuously meet customer expectations.

Additionally, you can understand the micro journey. A micro journey is characterized by small divisions that make up a customer journey. For instance, what’s their behavior when going through the payment process? 

Securing the micro journey is done using passive authentication—for example, relying on physical or behavioral biometrics rather than expecting someone to enter a password at each touchpoint. A digital experience analytics platform should ensure data protection at this stage as you improve customer experience.

5. Improve customer satisfaction by implementing customer input.

Enhance customer satisfaction by implementing insights from customers. People want companies to listen to them, respond to issues, and take action based on input—56% of consumers say a company’s response to a review changed their perspective on the business.

Additionally, research by Survey Monkey revealed that 91% of people believe that companies should fuel innovation by listening to buyers and customers, compared to only 31% who think they should hire a team of experts.

Incorporating customer feedback alone won’t necessarily take CX to the next level. But using all of these best practices will boost customer experience. And if you use a platform that prioritizes data privacy and security, you can implement a CX strategy without worrying about missing the mark on compliance. 

Take a customer-first approach with Quantum Metric. 

Financial institutions should meet changing customer expectations through customer-centric product design. But to achieve that, you need CX data.

With rich data insights, you can understand your customers’ current behavior and then tweak your digital products to align with their expectations and behaviors.

However, personal data must be protected and secured according to the FCA rules. That’s why you’ll want to partner with a customer experience solution provider that takes data privacy and security seriously.

A digital experience analytics platform like Quantum Metric gives incredible customer insights for CX optimization while protecting against data breaches. Talk to us today to gain your competitive advantage.

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