How speed of response is essential in staying ahead of regulatory action
Data from Ofgem shows that businesses paid out more than £70 million in fines and redress payments in 2020 – up from £15 million in 2010. With regulatory action having increased exponentially over the past decade, businesses need to ensure their regulatory change management is accurate and responsive.
One of the businesses to fall foul of the regulator in recent years is iSupply Energy, which was made to issue total redress payments of £1.5m in relation to incorrect charges for some customers, incorrect 'cheapest tariff' messages appearing on customer communications, and inadequate Priority Services Register registration.
Ofgem said of the decision: “iSupply had insufficient governance and processes in place to prevent and swiftly address non-compliance, which resulted in a range of issues that ultimately caused consumer harm.”
iSupply was far from alone. According to a survey by MetricStream, which polled 123 compliance professionals across North America and Europe, 19% of respondents reported taking up to a year to implement regulatory changes.
Keeping pace with regulatory action
Regulatory change management is a component of governance, risk and compliance. In its simplest definition, it is the management of “regulatory, policy, and/or procedure changes that apply to your organisation for your industry.”
Clearly, its importance is greater for businesses in highly regulated sectors. The volume of regulatory action now being taken suggests many firms need to re-engineer their regulatory change management. COVID-19, and the pressure this has placed on many businesses to adapt their strategies and processes faster than ever, has added further impetus for an evolution in regulatory change management.
In the utilities sector, there is also precedent for the regulator chopping and changing requirements in recent years. In one move, Ofgem ruled that electricity companies would be required to provide an annual statement to customers, independent of any other marketing material or communication. Because of the large number of additional communications this would necessitate, and the associated impact of bottom lines, the decision was ultimately reversed.
In cases like this, where the regulatory burden facing businesses changes quickly, speed of response is essential for remaining compliant and ahead of the competition.
Improving customer experience and the bottom line
There are obvious financial benefits to be gained from accurate and responsive regulatory change management. In a recent survey by Osborne Clarke, more than half (52%) of compliance professionals estimated that the financial return achieved through their organisation’s corporate legal compliance programme last year was £500k or above. A further 15% estimated that it was between £1 million and £10 million.
But the value of being able to respond quickly to regulatory changes goes beyond the bottom line. It also has a direct link to customer experience; after all, the regulator is acting in the public’s interest.
In a world where the customer is more aware of their rights than ever, they expect a flawless service. If they don’t get it, they may have grounds to switch providers – and they need little encouragement in sectors like utilities, where they are being urged to do just that for the sake of their pocket.
Finding a solution to streamline implementation
Many businesses are already trying to automate their regulatory change management with smart tech. These systems are no longer simply cataloguing the seemingly endless stream of regulatory data, they are employing regulatory intelligence to streamline the process, making it faster, smarter and more efficient.
However, as iSupply Energy showed, remaining compliant is just as much about being able to adapt customer communications in a timely manner. In large organisations, where operations, marketing and compliance often work in siloed teams with disparate systems, data and objectives, this can prove difficult.
This is where Paragon’s One Platform can offer real value, with automated workflows for sign-off through these departments. It breaks silos without the need for structural upheaval.
One Platform can also help with ‘everyday compliance’ just as well as big sector-wide changes. From a regulatory and compliance perspective, utilities companies need to let customers know that they have a bill and be able to prove that the customer has received it. With One Platform, you can see if a customer has opened their eBill, and if not, automatically revert to print to show the regulator you have done all you can to establish contact.
One Platform also facilitates quick changes in both data sets and communication messaging, so that you can continually optimise processes and management information, while receiving metrics on how effective your approach is.
The platform also seamlessly integrates with legacy systems, enabling you to level-up on your compliance and customer experience, without a heavy lift.
Amanda JessopAccount Director (C&CB)