Retail Distribution Review (RDR) and Social Media

While advisers are focussing on key aspects of RDR – such as qualifications and shift to adviser charging, they also need to pay attention to their communication strategy – i.e., changing communication needs of their customers. Social media is just one example of how the next generation does things differently, and how advisers may have to adapt to them.


Advisors may think that their current clients – the retiring baby boomers – still like the old fashioned face-to-face meetings. However, the object of their advise – their children, think differently. Naturally, the inheritors of the wealth are likely to gravitate towards the same advisors as their parents, but only as long as the advisors are serving their communication needs. The millennials (or Generation Y), are just not satisfied by one set of advise. They like to ‘trawl around’ on the web, engage in discussion forums, fish for more information on companies’ websites, comparison sites and social networks, before arriving at a decision. They are not happy with the annual statements received from the providers on their funds; they would like to view their funds at least once a month over the Internet.

Before they meet the advisers, they are sure to research the funds, their options, the comparative returns and thus go to the meeting ‘armed’ with a lot more information. And possibly, with an opinion on how they would like their funds to perform. In this situation, advisors need to (at least) aware of what is being discussed on these forum where their (potential) clients are actively engaged.

The millennials have – very often – conflicting priorities. More than the profit maximisations, they are driven towards ethics, morality and environment. Weren’t we the same a couple of decades ago? For them it is important to understand the green credentials of a firm (providers and advisors), their CSR activities and their ethics, before they would decide to invest in them.

Building and implementing a social media strategy is not difficult. It helps if advisors have a clear vision of their business, the profile of their clients and their expertise. Being a ‘Jack of all trades’ no longer work in this domain. Armed with your social media strategy, you have a clearer picture on who you want to target and for which products and services. Social media provides you an opportunity to engage with a much wider audience and understand the emerging needs of your potential clients. Once you have perfected the messaging on the social media, you’ll be surprised to find how quickly the message is being distributed to a very large audience (your potential clients). Your website is no longer a dull-and-drab page, but a ‘happening’ place for discussions on relevant (to your potential client) issues. Its like creating a new page every day. And pulling clients to your sites, by its contents.

While you are thinking about the new operating model in the post RDR world, it may be worth considering how to build these new practices in your business to be able to attract the next generation.

Customer Servicing @ Twitter

Twitter is just not to communicate with your friends; it can do a lot to your brand and your servicing.


What can 140 characters do for you? A LOT! Yes! A lot. Despite being designed as a two way communication channel for friends, Twitter has evolved to a serious business tool. And it just does not communicate your brand message. You can – and companies are doing it already – use it to enhance your customer support, turning customer complaints into customer compliments!

If you have not done so far, do a twitter search (search.twitter.com) for your brand. Chances are you’d come across people commenting on your products or services – some are good, and there may be some criticisms. So what do you do about it? You can (a) choose to avoid it; after all no one that you know uses twitter, or (b) deal with them head on. The first option can be risky. With 175 million (and growing) user base, the negative tweets have a fair chance of being commented upon, retweeted. And that does not hold your business in good stead. It is equally well known that the tweets do not stay on twitter. They are actively being included in web search results on Google and Bing, and are used to determine the (in)famous page rank on google. Think again, a web search on your product results in the first 5 results being negative tweets!

Little wonder why businesses are increasingly using Twitter and promoting it as a customer servicing tool. Creating a dedicated Twitter account for customer service (e.g., @CompanynameService or @CompanynameSupport) shows your customer you are treating Twitter as a legitimate way to talk to your business. It is just not there for brand building (often interpreted as one way communication), but to listen to customers and their issues. And you need not wait for customers to complain. Use Twitter search to find out if people have complained about your products and services before and start your conversation with them. Being proactive and searching out unhappy customers will earn a lot of accolades for your business. In addition you’d be seen as proactive and more likely to turn a (previously) dissatisfied customer into a ‘happy tweeter’.

Do not use Twitter to get involved into discussions with your customers. Use Twitter as a place to pick up an issue and move it quickly outside the forum to solve it. Of course, if you have solved the issue to the satisfaction of the customer, do ask him to tweet their feedback! If you are moving an issue away from Twitter, please remember that customer would expect the same promptness as on twitter. Just do a wild search on twitter to find out how many complaints are about the delay in response. If there’s a genuine reason for delay, reply to the customer’s tweets with the reason.

Twitter is a great way to build your brand while providing servicing to the irate customers. And it hardly costs anything. If your customers uses Twitter for raising their concern (or praising your business), you HAVE to be there to apprehend it and deal with it quickly and effectively. Nothing can be worse than unresponded tweets (and retweets, and re-retweets). If it has not been picked up by another irate customer, surely your competitors are not going to let it die down!

Solvency II – Does BPM hold the key to painless compliance?

Solvency II has forced insurance companies to relook at the business in a holistic manner – an end-to-end value chain consisting of internal and external business processes comprising of risk, finance, policy admin through to sales and distribution. No longer can executives afford to think of their functions as ‘islands’. There is an urgent need to stitch the disconnected systems, processes and stakeholders in a single ‘eco-system’.


Insurers since long have been having a flirtatious relationship with Business Process Management (BPM) tools. I guess, the time is ripe for BPM tools to shine and rescue the insurance companies from their plight.

So, how can BPM help insurance companies meet their Solvency II compliance?

Solvency II, in a nutshell, is about creating transparent processes across the organisation, which would help executives to get a pan-enterprise view of risk. The three pillars are built around identification, quantification and reporting of the risk to the regulators. In order to achieve this, insurers are building/revising their risk management frameworks. A Risk Management Framework (RMF) in a nutshell is an integrated view of risk management including consistent processes for analysing, evaluating, mitigating and communicating risks. RMF will enable an insurer to bring together a risk-based procedure, governance structure and integrated methodologies where the relationships between processes, risks, controls and regulations are made more visible.

BPM tools can help companies meet this challenge effectively. The formal processes, once approved by the regulators can be built using BPM and deployed in the organisation. Workflows are best placed to build governance structures to manage risks with built in triggers to escalate to appropriate roles in the organisation, should the need arise. Reporting (Pillar 3) can be delivered with greater certainty using the dashboards.

Solvency II is not ‘one-off’ compliance. CEIOPS expects insurance organisation to embed a culture of risk within the organisation, using Internal/Standard Model and Use tests to validate their risk management frameworks and constantly improvise the results for better quantification of risks. Building a ‘one-off’ compliance for Solvency II would entail repeated enhancements to the systems and processes. As against this, BPM tools provide the flexibility to dynamically change the processes with minimal costs and minimal down-time.

Documentation is another area of concern for insurers and regulators. CEIOPS has published guidance on this topic and insurance companies are expected to maintain comprehensive documentation on the processes with detailed explanation. While companies have been exploring Sharepoint and similar tools for this, I strongly recommend using the document management capabilities in BPM for this purpose. The document management capabilities in a BPM tools provides for scenarios where documents need to be accessed by a large group of people who need to collaborate on them. Another point in favour of BPM!

Many insurance companies have successfully deployed BPM in some functions (or majority of functions) in their organisation. It is the perfect time to extend the deployment to cover critical areas which would also help them comply to Solvency II.

Salaam Halaal closes for new business

Salaam Halaal - the first Islamic Insurance company in the UK today closed for new business after failing to raise enough capital.

Last July Principal Insurance Holding had created a history by opening the first ethical insurance company in the UK.  Salaam Insurance sold Halaal form of insurance which was Shariah-compliant.  Simply put, the company used first principles of insurance, coupled it with Quoranic guidelines (no interest, risk or speculation) to launch the new business.

The business had the right operating model, but wrong timing.  I'm sure we have not seen the end of Takaful in the UK.

More details on the closure are available here.