Navigating Regulatory Compliance

Our client is a leading financial institution in New Zealand, offering a wide range of lending and financial services, including credit cards, home loans, and personal loans.

To maintain their commitment to regulatory compliance and customer trust, they undertook a review of their systems, processes, and controls in response to changes introduced by the Credit Contracts and Consumer Finance Act (CCCFA).

The Challenge

To meet their obligations under the CCCFA, the bank needed detailed and accurate reporting to review compliance over the past decade and identify customers potentially impacted by errors for remediation. This required them to calculate the financial impact of errors and ensure affected customers were contacted and compensated fairly. However, several challenges hindered this process:

Historical Data Gaps: Data from the past decade was often unavailable or difficult to access, with many records stored in raw formats or fragmented across systems.
Data Quality Issues: Legacy systems and manual workarounds resulted in inconsistent data quality, making it challenging to identify errors and produce reliable insights.
Complexity of Analysis: The bank faced difficulties in calculating the financial impact of errors on individual customers and accurately determining the appropriate remediation steps.

Failure to overcome these issues could have led to regulatory non-compliance, financial penalties, and reputational damage.

Our Approach

We worked closely with the client to ensure compliance while building robust, repeatable processes for future use. Key steps included:

Defining Key Areas: Collaborating with the client, we focused on critical areas such as customer fees, overdrafts, and direct debit charges, ensuring all relevant compliance risks were addressed.
Building Accurate Data Models: Using data from multiple systems and formats, we built repeatable, accurate data models. These provided the legal team with clear insights to assess risks, quantify errors, and produce reliable reports.
Calculating the Impact: We used precise calculators to measure the financial effects of system and process errors, identifying impacted customers and determining the extent of remediation required.
Customer Remediation: Partnering with the Communications team, we developed a customer contact strategy, classifying account structures and tracking historical changes to ensure all affected customers were accurately reached and remediated.
Audit-Ready Documentation: To support future audits, we created tools to track remediation progress, provided customer service teams with necessary information, and documented all calculations and processes.
Proactive Compliance: We recalculated the bank’s loan portfolio to identify issues with contract variations and designed a loan repayment calculator to address potential future risks.

The Outcome

Our approach enabled the client to identify and quantify system and process errors accurately, remediate impacted customers, and meet regulatory obligations.

By addressing historical gaps and building scalable processes, the bank is now better equipped to manage compliance and reduce risk moving forward.