Why do organizations often delay remediating their customer files?
In our previous blog post, we discussed the importance of keeping customer records up to date, particularly for insurers. However, despite the significant importance, we have observed that many organisations tend to delay or postpone the task of bringing these files into order, commonly known as remediation. So, what are the reasons behind this? During my conversations, several factors have emerged that we would like to elaborate on.
1. Complexity
One of the most frequently cited reasons is the complexity and scale of the task. Insurers often possess extensive databases of customer records that have been accumulated over a long period of time. Consequently, collecting, analyzing, and correcting all these records can be a time-consuming and labor-intensive process. Paradoxically, the problem only worsens as files grow older and accumulate, making proper remediation more challenging.
2. Budget
Given its inherent complexity, remediation often entails considerable costs. Allocating funds for additional staff, engaging external service providers, or implementing new technologies and systems becomes a challenging proposition. Internally, justifying these expenses can be difficult when the remediation process does not appear to generate immediate financial returns for the organization. However, as I mentioned in my earlier blog, there are financial benefits to be gained by maintaining up-to-date customer records. Moreover, failing to have affairs in order when regulators come knocking can result in hefty fines.
3. Lack of knowledge
This factor is somewhat linked to budgetary constraints. If the required expertise is not available in-house, organizations must seek external assistance. The same applies to resources; they can be outsourced or developed internally, but the latter option inevitably incurs additional time and monetary investments. It is therefore advisable to collaborate with a party experienced in remediation processes to avoid unexpected costs.
4. Resistance to change
As with any organizational change, a remediation process also encounters resistance. Since it typically involves modifying business processes and systems, resistance is a natural response. Fear of this resistance or the failure to adequately develop a change management strategy contributes to delays in implementing the remediation process.
Why do you postpone remediation?