Reducing Cost-to-Serve in Financial Services Through Better Communication

Cost-to-serve is rising across financial services. Print and postage are more expensive. Contact centres are under pressure. Complaints and remediation work take time and money. At the same time, FCA Consumer Duty demands clearer, fairer communication for every customer.

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For many institutions, these pressures are treated as separate problems. In reality, they are closely linked.
Communication is one of the biggest hidden drivers of cost-to-serve. When messages are unclear, late, or sent through the wrong channel, costs rise quickly.

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This article explains how better communication reduces operational cost without increasing regulatory risk.

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What Cost-to-Serve Really Means in Financial Services

Beyond Fulfilment Costs

Cost-to-serve is not just about sending a letter or an email. It includes:

• Print and postage
• Digital delivery infrastructure
• Contact centre handling
• Complaint management
• Remediation and redress
• Manual operational effort

Many of these costs are triggered after a message is sent, not during delivery itself.

‍Why Communication Is Often Overlooked

Communication is often seen as a fixed cost. Ownership is split across teams. Legacy systems hide inefficiencies. As a result, organisations focus on headline costs while missing the root cause.

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Poor communication is expensive.

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How Poor Communication Drives Up Cost-to-Serve

Rising Print and Postage Costs

Stamp prices have increased sharply in recent years. High-volume statements and notices sent by default print add unnecessary cost when digital delivery would be appropriate.

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Without clear rules, print usage grows unchecked.

Increased Contact Centre Demand

Unclear or poorly timed communications lead to calls such as:

• “What does this mean?”
• “Why have I received this?”
• “What do I need to do next?”

Each call adds to cost-to-serve. In high-volume environments, even a small increase in contact rates has a significant impact.

Complaints and Remediation

When customers misunderstand communications, issues escalate. Complaints increase. Remediation programmes follow. FCA scrutiny intensifies.

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Remediation work is costly, slow, and disruptive. In many cases, the trigger is unclear communication.

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Why Cost Reduction Cannot Break FCA Compliance

Consumer Duty Sets Clear Boundaries

The FCA’s Consumer Duty requires firms to support good customer outcomes. Cost reduction must not disadvantage customers or reduce accessibility.

Digital-only approaches often create risk, particularly for vulnerable or offline customers.

The Cost of Non-Compliance

Cutting costs in the wrong way can lead to:

• Regulatory fines
• Large-scale remediation
• Reputational damage
• Long-term operational strain

Any cost-to-serve strategy must be compliant by design.

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The Role of Digital Mail in Cost Reduction

Digital-First, Not Digital-Only

Digital Mail allows financial institutions to send routine communications through lower-cost channels such as email or SMS.

Print remains available for:

• Regulatory notices
• Vulnerable customers
• Situations where delivery certainty is required

This balance reduces cost without increasing risk.

Rule-Based Multi-Channel-Intelligent-Comms

Multi-channel-intelligent-comms use rules defined by the organisation to control delivery. For example:

• Send digital by default
• Print only when legally required
• Honour customer preferences
• Escalate to print if digital delivery fails

These rules prevent unnecessary print and ensure consistency.

Fallback-to-Print Prevents Costly Failures

When digital messages bounce or go unopened, fallback-to-print ensures the customer still receives the information.

This prevents missed notices, reduces complaints, and avoids expensive remediation.

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Where the Real Savings Come From

Lower Fulfilment Costs

Smarter channel selection reduces print volumes and manual handling. Fulfilment becomes faster and cheaper.

Fewer Inbound Queries

Clear, timely communication reduces confusion. Customers understand what is required and when.

Lower contact rates directly reduce cost-to-serve.

Reduced Operational Rework

Centralised templates and automation reduce errors. Changes can be made quickly without manual reprocessing.

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Measuring the Impact on Cost-to-Serve

Metrics That Matter

Organisations should track:

• Cost per statement
• Cost per customer contact
• Complaint volumes
• Delivery success rates
• Time to resolution

These metrics show the true impact of communication on cost-to-serve.

Visibility Through Audit Trails

Delivery and engagement data provide insight into what works and what does not. This visibility supports continuous improvement and compliance reporting.

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Making Cost Reduction Sustainable

Aligning Finance, Operations, and Compliance

Communication should not sit in silos. Finance, operations, and compliance teams need shared ownership and clear governance.

Incremental Change, Not Risky Overhauls

Most institutions start with high-volume communications and expand gradually. This approach delivers savings quickly while reducing risk.

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FAQs

What drives cost-to-serve in financial services?

Fulfilment, contact centre demand, complaints, remediation, and manual operational effort.

Can banks reduce print costs safely?

Yes. Digital Mail and clear routing rules reduce unnecessary print while keeping compliance intact.

How does communication affect contact centre costs?

Unclear messages generate calls. Clear communication reduces inbound demand.

Does FCA Consumer Duty limit cost reduction?

No. It ensures cost reduction does not disadvantage customers.

What is the fastest way to reduce cost-to-serve?

Improve clarity, automate delivery, and optimise channel use.

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Key Takeaways

• Communication is a major cost driver
• Poor communication increases contact and complaints
• Cost reduction must remain FCA compliant
• Digital Mail reduces waste without increasing risk
• Multi-channel-intelligent-comms make savings sustainable

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Reduce Cost-to-Serve Without Increasing Risk

Discover how Micom helps financial institutions reduce cost-to-serve through compliant, efficient communication.

Explore Financial Services Solutions →

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References

• Financial Conduct Authority (2022). FG22/5: Consumer Duty Guidance, p.14.
• Financial Conduct Authority (2024). Communications Outcomes Review.
• GOV.UK (2024). Digital Transformation in Financial Services Report, p.22.
• Ofcom (2025). Universal Service Reform Proposal.

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