Cyber security and the fall out from Brexit will continue to dominate the priorities of organisations throughout 2019. Whilst firms are rightly focused on mitigating the risk and impact of cyber attacks, and analysing any changes to their products post Brexit, there is another area that we would suggest they get on top of sooner rather than later - that is their procedures for Bereavement, Guardianship and Powers of Attorney. This is particularly so following the final notice issued by the FCA to Santander UK plc on 19 December 2018 in which they were fined £32.8 million for failures in their bereavement processes and procedures.
As the FCA state in the final notice:
A bank is required to have an effective process for dealing with a deceased customer’s accounts and investments from notification of death to the transfer of funds to those who are entitled to receive them.
The FCA accepts that bereavement processes have and continue to be an industry-wide challenge. In the case of Santander, the FCA found serious failings in their process which ultimately led to it being flawed. The fine reflected that over 40,000 customers were directly affected, never mind the stress, detriment and inconvenience suffered by those representing the deceased.
We have identified five areas that firms should address in 2019 to meet the challenges identified by the FCA in its final notice:
This is perhaps stating the obvious, but firms should already treat vulnerable customers fairly. It's worth flagging that not all individuals contacting a bank about bereavement, powers of attorney or guardianship will be vulnerable. That said, it's useful to keep the FCA's definition of a vulnerable consumer in mind:
A vulnerable consumer is someone who, due to their personal circumstances, is especially susceptible to detriment, particularly when a firm is not acting with appropriate levels of care.
Firms should be familiar with the British Banking Association (BBA) report on Improving outcomes for customers in vulnerable circumstances. The Financial Services Vulnerability Taskforce was set up to implement the seven principles set out in the report. In terms of the progress being made, firms should consult the Lending Standards Board's review of progress towards implementation: see Summary Report.
2. Bereavement Principles
The Bereavement Principles published by the BBA in February 2016 set out how firms should deal with representatives of the deceased and next of kin. If you've lost a loved one you shouldn't be forced to go through multiple painful conversations to tell different teams in one organisation. Ideally, one notification should be enough. In addition, relatives don't want to be receiving letters marketing products to the deceased. The bereavement principles are designed with these real life experiences in mind. They aim to improve bereavement processes and mitigate detriment.
3. Death Notification Service
The Death Notification Service builds on the 'Tell us Once' idea found in the Bereavement Principles. The service is an online tool that allows you to notify multiple financial institutions of a death in one notification. The service has been up and running since 2018.