Compliance Monitoring

COVID-19 Crisis Management

DILIP MOHAPATRA

Jul 2, 2022 • 10 min read

The coronavirus outbreak is first and foremost a human tragedy, affecting hundreds of thousands of people. It is also having a growing impact on the global economy.

Indeed, the outbreak has the hallmarks of a “landscape-scale” crisis: an unexpected event or sequence of events of enormous scale and overwhelming speed, resulting in a high degree of uncertainty that gives rise to disorientation, a feeling of lost control, and strong emotional disturbance.

Financial services know this is an incredibly difficult time for families and businesses as people seek to make the right decisions for their own health and that of their families.

Customers are anxious and need information straight away. Many customers are vulnerable because they have lost their job, have a significant reduction in their income or have been tested positive with COVID-19.

The workforce is moving to a remote and distributed model. Compliance is equally important to ensure in the difficult times to ensure that the brand is truly supporting the customers when they need it the most.

Customer communication

The government has made clear that employers and employees should discuss their working arrangements, and employers should take every possible step to facilitate their employees working from home, including enablement of remote working. For example, we would not expect the following to go into work or meet customers face to face:

Financial advisers, as they can offer their services online or by phone
Staff who can safely and securely trade shares and financial instruments from home
Business support staff
Claims management companies and those selling non-essential goods and credit

With the majority of the workforce shifted to a remote working model, some firms have been experiencing significantly increased customer call volumes or online inquiries during the pandemic (e.g., due to significant market movements), causing huge operational challenges. There are a few reasons for this

Frequent policy updates: The situation is rapidly changing as the government reviews the infection and impact trend on a daily basis and making new announcements to protect the market and people’s livelihood. Many early announcements require more time to evolve into clear guidelines and to be effective
Time lag: There is a time lag in terms of firms understanding those policy changes and communicating with their customers.
Anxious customers: Customers are anxious about the evolving and dynamic market conditions. It is impacting them at an individual level, and they are keen to know what some of these changes mean to them. For example, the early release of superannuation, boosting cash flow measures for employers.

Overloaded call centers

Banks & insurance companies’ call centers have seen a massive spike in the last few days as people ringing to ask for financial assistance in the wake of the Government’s announcement of a six-month mortgage relief package with some customers complaining of a two-hour wait.

Some of the firms have recently asked customers via its Facebook to not call its contact center asking about the mortgage relief package as its wait times were very high.

Understanding customer need & prioritization

Many customers are currently in a vulnerable position because of the pandemic. This requires firms not only to be aware of the circumstances that their customers find themselves but also to support them as quickly as possible. Some of the questions that are quite pertinent

How do we understand the reason the customer is calling?
How do we identify people who need immediate assistance?
How do we prioritize calls?
How do we assess the first call resolution?

Potential fraud

The regulators have warned that dramatic news coverage of viral outbreaks and pandemics can be an opportunity for scammers to pump inaccurate information into the marketplace to try to manipulate markets and investors. The coronavirus is no exception. Job loss, financial strain, and social distancing are conditions that present fraudsters with an opportunity to pounce.

For example, ASIC has warned to watch out for scammers who try to take advantage of coronavirus (COVID-19). Scams can take many forms. Be wary of offers to assist you to access your superannuation or high-return investment opportunities.

In times like these, it can be difficult to separate fact from fiction. We are feeling strong emotions, are isolating for physical safety, and are uncertain what news may come tomorrow. So now is the time to move slowly, pay attention to details, and not make rash decisions. Be on the lookout for coronavirus investment scams and follow these tips to keep your money and personal information safe.

Businesses will need to be hyper-vigilant internally, sending reminders to employees on how to protect themselves and the business from fraud. As your workforce takes your business home with them, do they become more vulnerable to phishing attempts? In the comfort of their own home, amidst the fear and chaos, do your employees know what to do to protect themselves from such scams?

Operational risk & supervision requirements

Firms need to have contingency plans to deal with Covid-19 and those plans need to be been tested and implemented. This includes firms’ assessments of operational risks, the ability of firms to continue to operate effectively and the steps firms are taking to serve and support their customers.

It is also important to review business continuity planning regarding communication with customers and ensuring customers have access to necessary support during a significant business disruption. If registered representatives are unavailable to service their customers, firms are encouraged to promptly place a notice on their websites indicating to affected customers.

Firms should take all reasonable steps to meet the regulatory obligations which are in place to protect their consumers and maintain market integrity. For example, if a firm has to close a call center – requiring staff to work from other locations (including their homes) – the firm should establish appropriate systems and controls to ensure it maintains appropriate records, including call recordings if required.

Firms may continue to record calls, but in some scenarios, it may emerge where this is not possible. This is an area where regulators may provide further clarity in the future.

Supervisory control policies and procedures should be considered that will mitigate risks that may arise due to the reduced ability to communicate with customers, inability to rely on the mail or other disruption to the existing controls over communications with customers.

Changing regulatory priorities

As COVID-19 quickly spreads across the globe and has now been officially declared a pandemic, many companies are facing difficult business and legal challenges and are required to make some urgent decisions in order to keep their workforce safe and ensure business continuity.

Regulators expect all firms to have contingency plans to deal with COVID-19 and that the plans need to be tested. This includes firms’ assessments of operational risks, the ability of firms to continue to operate effectively and the steps firms are taking to serve and support their customers.

Many regulators including ASIC & APRA are focusing its regulatory efforts on challenges created by the COVID-19 pandemic.

ASIC encourages fair and efficient insurance claims handling. ASIC expects firms involved in handling insurance claims to act with the utmost good faith. ASIC expects the industry to communicate clearly and accurately to customers about their cover recognizing the changing situation they may be facing.

Industry code of conduct & changing disclosure/policy requirements

Insurance companies are required to consider very carefully the needs of their customers and show flexibility in their treatment of them. Customers’ behaviors change because of the pandemic.

This requires companies to clearly communicate any policy exclusions that may impact the cover and use of individual policies. This applies both to new sales or changes to existing policies (either mid-term or at renewal) – they must clearly meet consumers’ demands and needs.

On 11 March 2020 the Insurance Council of Australia declared Covid-19 an insurance catastrophe. The Insurance Council has also been very forthcoming and providing advice to policyholders things that need to pay more attention to their policies.

For example, below are the guidelines on the life insurance policy

“Life cover is taken out before 11 March 2020

Our Code subscribers have confirmed that there are no exclusions in their existing life insurance policies as at 11 March 2020 that would prevent the policy paying out for a death claim related to coronavirus, if you follow Government travel advice. No-one should be concerned about their existing life cover and you can always check with your life insurance company (for individual life cover), or your superannuation trustee (for group life cover in superannuation), about your cover.

For new life cover

If you have reinstated, increased or taken out new life cover since 11 March 2020 or are intending to do so, you should ask your life insurance company or superannuation trustee when your new cover will start and whether there are any exclusions. Remember, you can speak to your adviser or shop around.

You may be asked about your past or potential risk of exposure to coronavirus, for example, if you have recently traveled. Depending on your circumstances, the start date for your new cover might be deferred, for example for 30 days or until you have fully recovered from coronavirus if you have had it, or you might have an exclusion applied to your policy.”

Privacy act & protecting personal information when working remotely

Personal information should be used or disclosed on a ‘need-to-know’ basis
Only the minimum amount of personal information reasonably necessary to prevent or manage COVID-19 should be collected, used or disclosed
Consider taking steps now to notify staff of how their personal information will be handled in responding to any potential or confirmed case of COVID-19 in the workplace
Ensure reasonable steps are in place to keep personal information secure, including where employees are working remotely

Some tips for making sure reasonable steps are in place to protect personal information include:

Keep up to date with the latest advice from the Australian Cyber Security Centre
Agencies should ensure continued compliance with Protective Security Policy Framework requirements
Secure mobile phones, laptops, data storage devices, and remote desktop clients
Increase cybersecurity measures in anticipation of the higher demand on remote access technologies, and test them ahead of time
Ensure all devices, Virtual Private Networks and firewalls have necessary updates and the most recent security patches (including to operating systems and antivirus software) and have strong passwords
Make sure devices are stored in a safe location when not in use
Use work email accounts not personal accounts for all work-related emails that contain personal information
Implement multi-factor authentication for remote access systems and resources (including cloud services)
The only access to trusted networks or cloud services.

Complaint handling & AFCA

AFCA encourages financial firms to continue to

Work constructively and reasonably with affected consumers and small businesses during any period of disruption, particularly consumers and small businesses in hardship, or who may be experiencing difficulty repaying debt.
Openly and transparently communicating with consumers and small businesses about any delays they may experience in decision making, claims or complaints handling caused by the impact of COVID-19 on their business.

How Cognitive View is supporting customers in responding to COVID-19

As firms are moving to alternative sites and working from home arrangements, they must consider the broader control environment in these new circumstances.

Firms should continue to record calls, but in some scenarios may emerge where this is not possible. Firms should make us aware if they are unable to meet these requirements. We expect firms to consider what steps they could take to mitigate outstanding risks if they are unable to comply with their obligations to record voice communications. This could include enhanced monitoring, or retrospective review once the situation has been resolved.

Firms may experience difficulties in submitting their regulatory data, in which case we expect them to maintain appropriate records during this period and submit the data as soon as possible. Firms should not unnecessarily delay these submissions. If firms have concerns, they should contact us as soon as possible.

Firms should continue to take all steps to prevent market abuse risks. This could include enhanced monitoring or retrospective reviews. We will continue to monitor for market abuse and, if necessary, take action.”

1. Voice mail analysis & customer inquiry prioritization

The voicemail analysis will help firms to prioritize the calls based on need and urgency. The callbacks will focus on customers who are most vulnerable.

For example, if when the call volume reaches maximum capacity a voice mail functionality will be enabled to manage the load. The voice analytic that will extract words, topics and/or metadata from a voice input will be used for segmentation and automatically to create a support ticket with the right level of severity based on customer tone and sentiments.

2. Covid-19 insights

In response to the COVID-19 pandemic, the White House and a coalition of leading research groups have prepared the COVID-19 Open Research Dataset (CORD-19). CORD-19 is a resource of over 45,000 scholarly articles, including over 33,000 with full text, about COVID-19, SARS-CoV-2, and related coronaviruses.

This freely available dataset is provided to the global research community to apply recent advances in natural language processing and other AI techniques to generate new insights in support of the ongoing fight against this infectious disease. There is a growing urgency for these approaches because of the rapid acceleration in new coronavirus literature, making it difficult for the medical research community to keep up.

We have taken this opportunity to incorporate some of this data in our machine learning models to drive insights by term-matching and semantic signals. This will help companies to identify and prioritize COVID-19 customer related inquiries.

Such calls are classified with additional “Topics of Interest” such as COVID-19 which makes it easier to address them. You can even create a notification alert on COVID-19 which will enable the system to send you an alert on your choice of control whenever we detect a conversation that is related to it.

3. Fraud detection

We are continuously observing the regulatory guidelines and Australian Competition and Consumer Commission (ACCC) alerts to understand the scams and incorporate fraudulent behavioral patterns to detect fraudsters during calls in Cognitive View platform.

4. Customer vulnerability detection

In the current circumstances, customers who are vulnerable due to COVID-19 and financial hardship will be identified, in order to triage these cases into COVID-19 specialist teams who then manage the customer from that point.

Thus, it is important that firms prioritize the early identification of signs of vulnerability in their customers and provide tailored customer service with appropriate levels of care, effectively preventing their mistreatment.

5. Supporting regulatory changes

We are currently observing the regulatory changes and will be supporting the new/updated obligations to reflect that. This will also include any changes to the complain handling process and AFCA obligations. We are updating and supporting obligations in below areas

Changes that have been planned in 2019 and early 2020.
Changes that will be reflected post-COVID-19 world

We will be making more announcements in the coming days to reflect some of these changes.

6. Meeting duty of disclosure and T&C requirements

It is important that the current duty of disclosure be replaced with a duty to “take reasonable care not to make a misrepresentation”. Some consumers are overwhelmed by complex information and can find it hard to distinguish between promotional material and important messages about their products. This is a significant change that moves the burden from the insured to the insurer to obtain the information it needs to assess insurance risk.

It is important having

Financial products that are clear and easy to understand.
Feeling confident that your firm encourages disclosure, that they will work with you in your best interests.

Cognitive View analyses customer communication data and identifies if the firms are meeting their own disclosure and terms and condition requirements.

Drop me an email (dilip@cognitiveview.com) if you are keen to have a virtual coffee catch up to understand some of these imperatives better.