How Outcomes Management can Strengthen Regulations for Inclusive Finance

Question 2: What method do you use to collect information, and where do you stand in the process? Who collects the information, and how do you obtain customer data?

For FSPs, we collect financial statements, irregularity reports, AML (Anti-Money Laundering) reports, and CFT (Counter Financing of Terrorism) reports. In the past, we also collected compliance reports, which required entities to confirm their adherence to regulations. However, we realized this approach was too rule-based and functioned more like a tick-box exercise.

Because of this, we stopped compliance reports and instead developed the Conduct of Business Returns (CBR). Initially, this was rolled out to the insurance industry in 2017. The first phase focused on quantitative questions, allowing for quick analysis on a quarterly basis. This enabled us to track trends and engage with entities more effectively.

Two years ago, we expanded the Conduct of Business Returns across multiple sectors, including insurance, banks, pension funds, asset managers, smaller FSPs, etc. This broader approach allows us to compare trends across industries.

We published the first version of the Conduct of Business Returns last year, received industry feedback, and are now refining the second version. This will undergo further consultation and a pilot phase.

We are also changing the submission process to ensure faster data utilization. Larger entities will submit data via XML, while smaller entities will log into our website to submit their reports. The goal is to have a centralized database.

We originally aimed to start reporting this year, but due to the complexity of the process, we now anticipate implementation by the end of 2025. This shift requires industry collaboration, as it represents a major change—akin to moving the Titanic.

At the same time, we are reviewing other reports we collect to eliminate redundancy and ensure efficiency.

Question 3: What are the main challenges you face in this process?

The first challenge is securing industry buy-in. While entities already have the necessary data, they may not have it in the required format or level of detail. Larger entities typically have the data but need to adapt their systems, while smaller FSPs may lack the necessary technology or awareness of the data’s benefits.

We must clearly communicate why we need the data, how we will use it, and what entities can gain from it. This process can be costly for both regulators and industry players. To address this, we are investing in new systems and collaborating with other regulators to avoid redundant information requests.

The second challenge is data quality. Even after seven years of implementation in the insurance sector, we still face issues with data completeness and accuracy. Initially, we allowed a three-year grace period where entities could submit their best efforts to help them adapt. However, improving data quality remains a long-term effort.

Another challenge is capacity—both on the industry side and within the regulator. On our side, we need skilled analysts who can interpret data effectively and facilitate meaningful discussions with entities. Trust-building is also crucial, as entities need to believe in the fairness and purpose of the process.

Overall, it’s a long journey requiring continuous improvement in risk management and data utilization.

Question 4: What advice would you give to regulators and financial service providers who are starting this journey?

I hope we are inspiring others because there is a lot of value in this process for everyone.

One key lesson from our insurance industry experience is the importance of clear, transparent, and collaborative communication with the industry from the start.

With the Omni CBR, before requesting feedback, we conducted webinars for different sectors, explaining each question and its purpose. This built trust and ensured entities understood our goals. Many entities then proactively engaged with us to clarify questions before submitting formal comments.

Despite this, we still received pushback, which is expected. This is a costly initiative, and regulators must be patient, allowing for multiple rounds of consultation and phased implementation. However, clear deadlines are necessary to maintain progress.

Industry players should avoid outright resistance. Instead of rejecting changes due to cost or complexity, they should actively participate in shaping the process. Regulators and industry are partners—this effort benefits both sides. Industry is always ahead of regulators in innovation, so collaborating helps regulators keep pace.

A key benefit of this process is creating a level playing field and improving consumer trust in financial services. Consumers need to see that real work is being done to ensure fair outcomes.

Question 5: If you had to choose one key indicator or type of data that you find most useful, what would it be?

That’s a tough question because I like many indicators!

One important aspect is that complaints data alone is not enough. While we collect complaints and customer survey data, we also focus on indicators that reveal corporate culture.

For example, beyond just tracking complaints, we ask:

• How long does it take to resolve a complaint?
• What is the customer experience like for payments, refunds, or fund transfers?
• How quickly does an entity execute customer instructions?

These turnaround time metrics allow for benchmarking across the industry. Entities often ask, “If this isn’t acceptable, what is the industry standard?” With this data, we can provide accurate benchmarking insights.

This is crucial for industry self-assessment and improving customer experience. I could talk about this all day, but I’ll stick with turnaround time indicators as my top choice!