Banks tell CFPB to back off on customer service

Banks tell CFPB to back off on customer service

If the CFPB is truly trying to limit AI technologies in banking, it would draw a hard line for how the technology could be used. Earlier this year the Office of the Comptroller of the Currency (OCC) advocated the use of AI for regulatory compliance at banks.

Overreaching CFPB: The banks’ response to the RFI comes as tensions mount between the regulatory agency and trade groups. In June, the Chamber of Commerce launched an advertising campaign against the CFPB’s Director, Rohit Chopra.

  • The group accused Chopra of trying to “radically reshape” the American financial industry, and said the agency is overstepping its ability to act outside of federal court.

In this other instance where banks felt the CFPB overstepped their authority, the Chamber of Commerce joined other trade groups—including those involved with the letter on customer service—to commission a paper on the CFPB’s proposed changes to regulations on unfair, deceptive, and abusive acts and practices (UDAAP), which says the CFPB is acting in areas where the laws don’t apply.

The CFPB has vowed it will review a wide range of topics that it claims must be reformed to better protect consumers. They include overdraft fees, open banking regulations, and consumer data protections.

The big takeaway: The response to the CFPB’s inquiry on customer service may be based on a false assumption about the agency’s intentions. But it could affect how banks respond to customers’ desire for greater personalization.

  • Banks that build their brand on stellar customer service and identify the true needs of customers seeking customization could gain a competitive advantage in the market. But prescriptive rules on customer service would eliminate that advantage.
  • Re-engaging disengaged customers would be difficult if customers were able to get the same undifferentiated level of service from any competitor.
  • A more relational approach might actually detract from a good customer experience as banks become pressed to service more customers in a less efficient, less technology-driven way.

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