ComplianceRaising the Bar

Chris BallHead of Collections and RecoveriesNationwide Building Society

CCRi, 6 October 2015

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• World’s largest building society and UK’s largest mutual

• We have a heritage we can be proud of – established in 1846

• Dedicated to serving the financial needs of our 15 million customers

• Assets of just under £200 billion• Second largest savings and third largest mortgage

provider in the UK• Nationwide family includes:

Derbyshire, Cheshire and Dunfermline Building Societies

• Over 15,000 employees• Over 700 branches

Nationwide Building Society

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This time last year …..

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Callassessmen

t

Listen to the

customer

Casereviews

Complaints

GO

VERNAN

CEWe were talking about evidencing ‘Fair Customer Outcomes’

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Premiership champions in 2012/13

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We celebrated our Credit Excellence Awards win and then decided that it was a good time to review our approach…

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• Conduct Risk Review

• Collections and Recoveries Structure – Direct report structure and team make up– Independent assessment improvements

• 3rd Party Framework and Strategies – Review our panel – Review Our Strategies

• Evidencing the Customer is at the centre of our decision making

We knew we that we could improve…

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Nationwide reviewed our framework and developed a set of 5 Conduct outcomes

• These outcomes aim to provide a consistent view across the Society (from Board to front office) of what a fair outcome should result in at Nationwide

• They expand on FCA’s TCF outcomes with the added emphasis on strategic and business model judgements, wholesale/market conduct and behavioural economics in the retail market

• Consequently the manner in which our business areas structure themselves had to evolve to help us identify where fair outcomes are not being achieved. This included reviewing our control and oversight of risks.

A new Conduct Risk Framework

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Our structure was designed to help us make sure that we delivered on our promises …

• Collections and Recoveries is a 1st line of defence function within Nationwide’s 3 line of defence model

• Collections and Recoveries – our 1st line operational teams• 1B review by Risk, Controls and Quality and Strategy teams

gave us strong and effective controls

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• We introduced a new small Customer Conduct, Policy and Process review team building on our ‘Money advice liaison’ role

• The team have been given the remit to challenge ‘how’ we operate from a Customer Outcome and Conduct Risk perspective

• We also increased our Risk and Controls with dedicated 3rd party and complaint review teams

We improved by introducing a ‘challenger’ role

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• We reviewed our Risk management Framework and concluded that our 3rd parties reliance is one of our key risks– Are our controls and checks good enough to demonstrate

effective control?– Benchmarking and FCA readiness meetings

• Internal or External?– How do we mirror the internal and external experience and

ensure our members experience the ‘Nationwide’ way?– We decided to consolidate our panel

• Are our Strategies still relevant and appropriate?– Recoveries DCA strategies have been reviewed and will be simplified– DCA remuneration under review. To be outcome based– Debt sale strategy.

Our 3rd Party partners are a key part of our strategy and model

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• Our thinking will continue to evolve as we believe

‘Better never stops’

• The Future– Demonstrating the ‘Customer’ at the heart of all of our

decisions– Driving Fair Customer Outcomes– Managing and improving our conduct risk agenda

• Questions ?

Summary