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How Your FI’s Back-Office Efficiency in Regulatory Compliance Impacts Your Customer Experience

Though back-office staff may spend less time face-to-face with account holders than frontline employees, their day-to-day activities directly impact customer experience (CX) and satisfaction.

For instance, the customer journey from initially filing a Regulation E (Reg E) dispute to finally resolving the return of funds can be a strenuous and emotional process. If the bank or credit union is filing disputes under a manual Reg E claim process, these pain points are often further heightened.

The customer experience journey

Operating under a manual process, the back office is more susceptible to human error, impacting how quickly customers have their funds returned. After a breach in their finances, customers must work with their financial institution to complete a dispute form. If it is executed incorrectly, the customer will have to continue to work with the institution to amend it. Once the dispute form is accurate, the consumer must sign the form in-branch, stepping away from their personal or professional lives to do so. When the form is finalized, most back offices operating under a manual model of processing enter the dispute into a spreadsheet program, such as Microsoft Excel, and calculate deadlines, which all are prone to inaccuracies. It is only after all these actions that the investigation begins.

A back-office employee must then calculate provisional credit, credit the customer account, upload to the processor for chargeback and generate the provisional credit (PC) letter, which requires devoted time and attention to detail. Quality control is necessary to ensure accuracy. Once all these items are settled, the employee must check the payment processor for updates – rechecking daily – until the outcome is received. Only afterward can the back office update the dispute in their spreadsheet software and generate the customer notice. 

Throughout this time, a customer is waiting to hear the conclusion of the investigation. At any point in this process, if a form is filed incorrectly or contains inaccurate information, the process can be stalled, slowed or even require another interaction from the frustrated customer. Though a back-office employee may be spending additional time on a dispute to ensure accuracy and avoid losses related to non-compliance, customers often do not see those actions. Customer frustration makes sense – these funds are essential, and the consumer is entirely reliant on the activities of the back-office personnel, though they may not see them every day.

How to improve back-office efficiency in regulatory compliance

FIs must take steps to ensure that the Reg E dispute process is as simple and streamlined as possible for both the back-office staff and account holders. To do this, FIs must consider how new solutions can streamline existing systems and maximize operational efficiency.

One way to achieve this is through process automation. FIs can eliminate paper forms and leverage digital forms, automatically adjusting accounts and accurate alerts for deadlines, reducing error rates. In addition, the back office can also leverage document generation and e-signature technology, allowing account holders to update or complete forms remotely and at a convenient time and place.

And this automation can make a significant impact – fast. First Bank, which operates nine branch offices in Illinois and Indiana, reduced bank claim processing time by more than 50% after implementing FINBOA’s Reg E Dispute Tracking solution. The automation also resulted in a noticeable improvement in cross-team communication.

The last word

Customer experience and back-office efficiency go hand in hand. Because of the high-stress nature of filing a Reg E dispute, a financial institution’s back office must be equipped to provide the best service possible. Process automation can transform the way that back-office staff conduct business, reduce errors, save time and ultimately improve the overall CX.

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