Insurance firms affected by the FSA's Treating Customers Fairly (TCF) regulation need to have the right IT in place by the end of this month if they are to avoid being penalised.
TCF rules that, by the end of December, insurers must be able to demonstrate that they provide fair treatment to customers. It covers services such as how they recommend products, provide after-sales support and handle complaints.
"It will be fully embedded within business practice by the end of December and businesses must ensure it is a permanent fixture in their business models," said the FSA.
Firms need to have the technology in place to ensure that the details of all their sales are securely stored and archived and can be found if required. This is so they can prove that customers were given the best possible deal at the time the sale was made.
According to Pierre Audion Consultants (PAC) UK insurers are facing increased regulatory pressures to control risks and reduce the mistreatment of customers.
It said they will spend money on outsourcing and software to help monitor customer satisfaction. Insurers will also spend money on front office systems and CRM to improve the way they serve customers.
In September last year Endsleigh Insurance Services began implementing Microsoft Sharepoint across its business to help it meet the TCF requirements. The software helps the insurer search for archived information to display that customers were given the best possible deal available at the time.
Prudential has also invested in technology to help it adhere to TCF compliance. Last year it bought software from Thunderhead to enable it to manage customer communications across various channels such as voice, mail and the web. This helped it provide consumers with clear information before, during and after the point of sale.
Standard Life has replaced legacy systems with up-to-date software applications to meet the regulation. It has built an Oracle datawarehouse to produce accurate data. It then linked the datawarehouse to software from Cognos, which retrieves information and presents it to managers. The firm recently linked the datawarehouse to software from Callidus to make the sales process more visible.