The introduction of General Data Protection Regulation last year highlighted the challenge faced by the financial services industry in navigating contradictory legislation and regulation on client communication, a life assurance provider has warned.
Neil Hugh, head of customer and workplace strategy and development at Standard Life Assurance, said the regulation provided the "necessary impetus" for businesses to review who they had the right to contact in a more "nuanced and robust manner" than ever before.
But Mr Hugh warned the industry now faces the challenge of simultaneously navigating legislation which tightens up customer contact, while being urged by regulators to communicate more.
Rules under the GDPR came into force on 25 May 2018, introducing the need for explicit consent to be obtained for the collection of data and all the purposes it is used for, with all data breaches to be reported within 72 hours.
The introduction of Mifid II on January 3 2018 now requires all financial service providers that operate or deal in the EU to record telephone conversations and electronic communications that relate to the "reception, transmission and execution of orders, or dealing on own account".
Mifid II also requires financial advisers to disclose actual costs and charges associated with the investments they recommend to clients rather than estimates.
Mr Hugh said: "Looking back on the events that shaped our sector in 2018, it feels as though it has been the year of rethinking how we as an industry communicate.
"The last 12 months have been spent revisiting the fundamentals of how and when we contact our customers and clients."
Mr Hugh also referred to the five-point plan released by the Association of British Insurers in April last year in the hope of increasing customer engagement with their pensions.
He said: "The recommendations focused on the need to provide communications to customers throughout their financial life journey, with relevant information to support their decision making.
"This is something that most of our industry will have been working towards for some time; however, it is the combination of relevance and timeliness that will be key to this."
Mr Hugh urged caution that reaching out to customers and clients with a generic message can be counterproductive, leaving them less engaged than before.
Mr Hugh said: "Communications will continue to be a focus in the year ahead as our sector builds on the past 12 months to ensure we are all helping our customers and clients achieve the best possible outcomes. In 2019, let's do even better."
rachel.addison@ft.com
