Does Compliance Have to Come at the Cost of CX in Regulated Industries?

Customer experience has long been an issue in regulated industries. When things are deemed serious, or when there are heavy penalties associated with missteps, the path of least resistance is to play it safe. In practice, that often ends up looking like experience sacrifices made in the name of compliance.

But, do you really have to trade-off customer experience for compliance in regulated industries?

A common pattern from our experience work — particularly in industries like financial services, insurance, and healthcare — is that what can look like a real constraint is sometimes just a self-imposed belief that has emerged alongside genuine compliance concerns. And, that discerning one from the other is where a lot of customer experience gains can be found.

Where a lot of experience tension tends to reside is in between seriousness and usability.

Specifically, when we want to convey seriousness, or act seriously – especially inside of regulated industries – there is a tendency to insist that formality runs through everything. Even if it comes at the expense of clarity, usability, etc.

This doesn’t always have to be the case.

Formal-looking and formal-sounding aren’t the same thing.

As you might expect, formal-looking official communications outperform “friendly” re-designs of these same documents by a good margin – at least, according to research from Harvard’s People Lab, published in Nature Human Behaviour. In that research, formal-looking official communications outperformed friendly, colourful redesigns by 25 to 45 percentage points on driving whatever action is associated with those communications. Serious looking documents do what you think they’d do – they get people’s attention, they feel credible and prompt action.

But, that same research shows that perceived formality can be raised without increasing language complexity. In instances where the design stayed formal and the language became plainer, the formality advantage held. You can make a document look serious without making it feel like that scene from The Matrix: Reloaded where Neo meets the architect.

MIT also ran a series of studies that looked specifically at legalese – the part of every experience that most regular people tend to ignore. What this study found was that lawyers themselves comprehend plain-language contracts better, and rate them equally enforceable. They would also rather hire a plain-language document author over one that wrote legalese for the same purpose.

What’s funny about these studies, and connected directly to the idea of self-imposed beliefs versus real constraints, is that when laypeople were asked to draft laws, they would spontaneously slip into convoluted legalese. When asked to draft stories, they didn’t.

It can all be more of an authority ritual than an actual requirement. The same can be said for what sometimes happens inside of organizations.

But isn’t strategy about trade-offs?

Real strategic choices force you to prioritize one good thing over another. Good customer experiences are… good. Not getting in hot water is also good.

But ‘serious’ and ‘usable’ aren’t always in opposition. Sometimes the tension between them is just the product of stories an organization and the people within it tell themselves. For example, I recently watched one person retiring shift the entire conversation around a process, and people’s willingness to try and improve it.

More folklore than genuine requirement.

In the context of customer experience and experience research, this is where stakeholder interviews can be immensely valuable, but only if you don’t treat them as being a source of infallible truth. The value of an external partner is that they’ve got the freedom to question where individual and organizational beliefs come from – even if compliance and regulatory things aren’t their primary domains of expertise. Reading between the lines is where the value comes from here.

Untangling folklore from genuine concern

So, can you improve usability without undermining rigour? Can a process be more customer-centric and still satisfy the compliance team? Unless there is citable evidence of the answer being unequivocally no, you’ve likely got room to pursue experience improvements by removing sludge.

Here’s a couple of things we find useful in our own experience work:

• When you’re doing discovery, ask stakeholders to point to the source of “we can’t do that” claims you hear. You’re looking for a specific regulation, policy or person. I find more often than not, you get a person, which can be telling.

• When you get source material, read the source yourself. Some things become folklore simply because everyone is too busy to meaningfully engage with them. This is unglamorous but helpful work.

• Look for peer organizations that have already done the thing your team says can’t be done. Adjacent spaces with similar constraints are immensely useful for getting people out of a this or that lens and into a place where they can see the inbetween.

When beliefs can be linked back to genuine requirements, treat them with the seriousness they deserve. But when they dissolve as you follow them upstream, treat them as folklore. A lot of CX conversations would go better if we were all clear about what is a genuine concern, and what is merely folklore.

Is your team thinking about how to improve experiences for those inside or outside of your organization? If so, let’s talk.