Linking Customer Experience Management and Risk

June 8, 2017

Research shows that customer service and sales are two areas where high levels of fraud have been identified. An organisation that invests in a well planned Customer Experience (Cx) Management Program is more likely to have customers who:

  • respond positively;
  • trust the company and staff;
  • maintain a positive cycle/relationship with the organisation;
  • remain loyal to the brand; and
  • provide a higher Net Promoter Score (i.e. be advocates).

It also opens up opportunities for customers to be protective of the brand and report unusual activity or activity which threatens the brand e.g. fraud or corrupt practice. In fact 18% of tip offs come from customers, hence another reason to maintain an effective Cx Management Program.

Good Cx also requires high employee engagement. We find, however, that employee engagement is lowest in frontline/customer facing roles as they are often  furthest away from the Chief Executive, lowest paid and too far removed from organisational strategic and operational input.  With disengagement comes less attachment to the organisation and higher potential for negative impact on processes, less vigilance or care and opportunity for employee fraud and corrupt practice (risk).

Employee engagement and good Cx go hand in hand. Both impact each other. If employees are disengaged, customers can become less loyal, more disruptive and complaints increase (resulting in higher cost).

Employees contribute over 50% of tip offs. So engaged employees are necessary to help in this process.

An added complexity is that by 2020, customers will more than likely not deal with humans but technology. It is predicted that 85% of interactions with an organisation will be via technology. This will greatly impact how fraud is detected which, at present, in majority of cases, is via tip offs. Looking forward, there needs to be some way in which, what was normally identified through tip offs, can be identified through technology. Managing this without transaction transparency requires some innovative thinking.

Call to action: If you are an auditor or risk manager, look at the current customer satisfaction scores, Net Promoter Score, level and type of complaints, scale and impact of significant  customer pain points ("moments of truth”) as well as employee engagement scores (e.g. HR surveys and employee satisfaction levels) to assess potential risk.  The worse these results, the higher the potential risk of fraud.

Everything works hand in hand. A vicious cycle will exist with opportunity for fraud if there is poor employee engagement or poor Cx.

Centium is pioneering the way in which Cx can be used to help manage risk, fraud and corruption. To find out more about these innovative approaches, contact any of Centium's Directors or our Cx Management Practice Lead, Kimberley Reynolds.

Article authored by: Kimberley Reynolds and Stephen James.

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