London (PRWEB UK) 3 August 2012
New rules announced today by the Financial Services Authority (FSA) to improve packaged bank accounts have been welcomed by incremental revenue experts Collinson Latitude as beneficial to the consumer and reputation-enhancing for banks.
Following the FSA’s recent consultation paper into packaged bank accounts, through which account holders pay a monthly fee in exchange for a bundle of products, the regulator has announced changes which all banks and building societies will need to implement by March 31, 2013. These changes will ensure more tailored added-value benefits are offered to customers, as well as facilitate informed decision-making when customers are considering their options to buy.
Specifically, the new rules require banks to check whether the customer is eligible to claim under each insurance policy and share that information with them. In addition, if a sales adviser is recommending policies in the package, they must establish whether each policy is suitable for the customer and inform them if some are not. Banks must also provide customers with an annual eligibility statement setting out the requirements for claiming each of the benefits in a package’s insurance policy, which should prompt customers to check whether their circumstances have changed and whether the policy continue to meet their needs.
Janet Titterton, director, Collinson Latitude, says: “Banks in the UK have been given an opportunity today to improve the job they do for customers and thereby emerge stronger. There is a promising future for packaged current accounts, providing banks listen to account holders and deliver increased choice, relevance and transparency in the bundled products they offer. By implementing these required changes, banks can add greater value to packaged accounts and prove the worth of these products by offering more tailored benefits.”
Titterton adds: “The FSA has acted to ensure consumers are clear about the terms of insurance policies bought through packaged current accounts, so account holders can be sure they are eligible for the cover specified. The FSA has also addressed the rolling nature of these insurance contracts to provide a better opportunity for customers to reassess and evaluate the value and suitability of policies on a regular basis.
“Packaged accounts have become an important source of revenues for banks, given the financial pressures institutions face from multiple sources. However, the traditional trust between account holder and bank has been dealt a blow through the credit crunch and recession, which has increased customers’ propensity to shop around for services. The proliferation of comparison websites that allow consumers to compare the market price of benefits, and the relative ease of switching to a new provider, has placed increased pressure on banks to provide value for money within these fee-based accounts. By highlighting some weaknesses in how packaged accounts have been designed and are communicated, the FSA is creating a chance for banks to respond and win back trust from their customers.
“By offering more tailored and diverse benefits, banks can increase the appeal and perceived value of packaged accounts, providing relevance for the customer. The next generation of packaged accounts should offer greater flexibility in the bundling of benefits with clear and relevant ‘upgrade’ paths of specific additional benefits. Banks can therefore continue to offer the core benefits for wider appeal, with customers then selecting the benefit upgrades that are more personalised to their requirements.
“It is in the interest of banks to prioritise how packaged accounts need to evolve because they provide substantial incremental revenue as well as added value to loyal account holders. There is likely to be a greater emphasis on leisure and lifestyle benefits to reflect the specific life stages of customers. In so doing, banks can retain customers for longer by offering products that can be tailored to their changing needs and evolve with them.”
Collinson Latitude provides companies with the tools they need to develop profitable relationships with their customers. The company’s portfolio of travel benefits includes travel planning services, travel assistance, emergency assistances and enhancements for frequent travellers, while its insurance products are tailored to specific market needs and commercial requirements. Collinson Latitude can supply incremental revenue solutions to banks and building societies across the UK, Europe, Middle East, Africa and Asia Pacific.
Notes to editors:
About Collinson Latitude
Collinson Latitude (http://www.collinsonlatitude.com) is a leading provider of products that deliver incremental revenues for brands and enhancements for reward and loyalty programmes. Our innovative products deliver relevant and rewarding customer experiences by adding value and choice to memberships and loyalty. We give brands across the travel, financial services, telecommunication and retail industries the tools to reach their full profit potential through products that generate and sustain active, loyal and profitable customers for life.
Collinson Latitude’s products can be deployed rapidly and configured to individual requirements, drawing on the company’s proprietary technology and extensive global partner network. Collinson Latitude is part of The Collinson Group, a privately owned, independent organisation which has over 25 years’ experience in memberships, loyalty and marketing services.
To read more about the range of added value packages from Collinson Latitude, visit http://www.collinsonlatitude.com/benefitsplus