• Brad Kutler
  • Published: 29 May 2019

During the fall of 2016, federal regulators revealed Wells Fargo employees had opened millions of unauthorized accounts due to their aggressive sales practices and lack of internal oversight . Following the announcement at Wells Fargo, the Office of the Currency Comptroller (OCC) began a horizontal examination of sales practices at more than 40 large and mid-sized banks . The goal of the OCC horizontal examination was to ensure banks approach sales practices in a manner that did not result in consumer harm. The horizontal examination found instances of banks failing to document customer consent for account openings.

The OCC issued warnings around customer consent issues that forced banks to address these matters quickly or face a regulatory penalty. As a result, many banks addressed the OCC concerns through quick fixes that satisfied the review but left these institutions with clunky, manual processes. 

In the aftermath of this review, banks still face many challenges to improve their sales practices oversight. A common problem that banks face is the fragmenting of much of the sales practices reporting sources throughout the organization. Generally, aggregating this data is a very manual process and may take a significant amount of time to collect, which yields diminishing returns. 

If banks can automate the reporting necessary to report sales practices risk, they could reduce the amount of time and resources spent aggregating, presenting, and analyzing data to unlock additional resource capacity. Additionally, banks may have missed an opportunity to use this data in a meaningful way to help drive revenue. Banks need to think about how this data can inform business decisions that go beyond regulatory compliance.

While banks are now better equipped to mitigate and report on sales practices risks, banks have an opportunity to reduce costs related to operating a sales practices program and implement operational improvements. Here are three ways banks can improve their sales practices programs: 

1) Create A Sales Practices Data Warehouse

Sales practices reporting may pull information from a variety of disconnected systems to produce a holistic view of sales practices metrics. Accessing these metrics from across different business units and data sources may require the assistance of many resources. To reduce the time spent aggregating data, banks can create a sales practices data warehouse. These data warehouses can be created through a variety of off the shelf solutions from Teradata, Oracle, and Amazon Web Services if no viable tools currently exist at the bank. A sales practices data warehouse reduces the time it takes to collect these disparate metrics, thus reducing the resources needed to report sales practices metrics. 

2) Automate Sales Practices Report Creation

Some banks may still be creating sales practices reports manually, where each metric is placed in a presentation and manicured to present to management. The sales practices group can instead use tools such as VBA in excel or Tableau to pull metrics into a monthly or quarterly report automatically. Creating a solution to collect and present these metrics automatically will not only reduce the effort of the person generating this report but also reduce the effort of the employees who check these reports for errors. Additionally, automatically creating reports increases the delivery speed between when the data is collected and when it is sent to executive committees. 

3) Use Sales Practices Data to Inform Business Decisions

Banks examined by the OCC are required to report accounts opened and closed within 60 days, and accounts opened and never used.

Using this data to determine the root cause of these metrics may not only provide banks with information on sales practices but may also inform banks on how well they are serving their customers.

If for instance, a bank is spending acquisition dollars on a customer segment that seldom uses their credit card, the bank could reconsider their spend on non-productive customers and potentially deploy their investment elsewhere. While this is just one example of how banks can better utilize their sales practices data, banks need to think of ways they can use their sales practices data in a more meaningful way to inform intelligent business decisions, generate revenue or reduce operating costs. 

Generally speaking, banks have been able to adequately mitigate sales practices risks and restore consumer confidence in banking integrity across the industry, yet few have capitalized in this opportunity to streamline their sales practices processes. With the OCCs sales practices horizontal exam in the rear-view mirror for most banks, the logical next step is to think about how best to optimize their sales practices processes. These improvements can potentially increase resource capacity, reduce manual errors, trim costs, and inform business decisions.

For more information on how we can help your business optimize sales practices, please contact Brad Kutler.