Something that has struck me recently, is that financial services compliance, risk and governance is very much focused on process. Which is understandable. But where does that leave outcomes? Do we even care about the outcome as long as we have a good* process?

Read on to learn more about why only focusing on process can lead us down the garden path, and why a focus on outcome might be a better approach.

*You won’t be surprised to learn that I don’t think a process is all that great if the outcome isn’t good!

Why DO we focus on process?

Mostly, I believe, because it’s all we’ve got. The goals might be lofty, but since they are incredibly difficult to measure, we focus on process instead. Let’s review a few in recent(ish) times:

  1. AML. Lofty goal – make it as difficult as possible for people to use the financial system to money launder or finance terrorism. Do we now have robust processes in this space? Absolutely. Have they worked? No idea.
  2. FOFA. Lofty goal – put consumers front and centre by banning commissions and putting advisers and product providers to work for consumers instead of themselves. Have we all duly removed commissions from our products and stopped taking advisers on trips to the Bahamas? Er, mostly. Has it worked (and by worked I mean delivered better outcomes to consumers)? No, not really. It hasn’t changed anything at all for consumers, just added another layer of complication to an already extremely complex operating environment.
  3. Disclosure*. Lofty goal – if we explain everything clearly enough, consumers will make good decisions. Has it worked? Nup.

*Yes, I know ‘disclosure’ isn’t a particular regime, but it does underpin a large amount of what we do and how we do it.

Could we have focused on outcomes instead in any of the above?

No, not really. They are just too hard to measure. Please do reply and tell me I’m completely wrong if you like!

Surely DDO isn’t any different?!?!

So here’s the thing. With DDO, you DO have a choice. You can continue to just focus on the process. (I put ‘just’ in italics as I know it’s still a huge amount of work). Or you can consider whether this might finally be the legislation where you can aim for ‘outcome’ instead. And then use process to demonstrate how you’ve delivered the outcome.

Really Sarah?

Yes! In fact, this is why our first step in creating Wattletree was to think about what a quarterly report might look like. Can we prove that your reasonable steps are working (or not!) and give you clear evidence of that fact? Yes, yes we can.

And if we can demonstrate that you are getting the right outcome, then the need to do some of the mental contortions I’ve seen recently just falls away.

You can codify your current product development, marketing and distribution processes and standards, and then Wattletree can demonstrate that the OUTCOME is the right one – that your products are being delivered to your target market.

In my view, this approach can remove a considerable amount of angst and gnashing of teeth around ‘does our process go far enough?’, ‘what if the platforms won’t agree to our reporting requirements?’, ‘what questions should we ask up front?’*, and lots more.

Instead, a clean, simple, quarterly report, for each product, that demonstrates the outcome of your DDO efforts. Nice.

*answer: none.

Let’s talk

If there’s a burning DDO question that no-one seems to have a good answer to, or you just need to understand how Wattletree works in more detail, please get in touch. I invite you to shoot through your Q’s using the below form or alternatively you can call me on 0417 970 818. There’s no such thing as a silly question*

*OK, we all know that’s rubbish but you know what I mean!

    Cheers, Sarah

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