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Why Automating Reg E Dispute Management is a Game-Changer for Customer Experience

The use of cash and checks continues to decline as the volume of digital payment transactions rapidly increases. Driven by eCommerce and the wide spread adoption of electronic payment options, financial institutions are seeing growing revenues fromthe increase in electronic payments from their customers,giving rise to a growing number of electronic payment disputes. Most banking institutions struggle to address and resolve these disputed transactions quickly and accurately for their customers. Paper-based processes are not scalable, accurate or reliable. Inadequate communication and missing or incomplete data can prolong dispute resolution. Time is wasted and customers are unhappy.

Regulation E (Reg E) governs the compliant resolution of customer disputes for ACH, debit card, ATM and other electronic payments. Maintaining compliance with complex Reg E rules amid increasing dispute demand places a significant time and resource burden on banks. While banks strive to provide customers with a convenient and timely claim resolution process, relying onmanual compliance systems to process disputed transactions creates a fragmented and frustrating customer experience.

Understanding customer expectations

Digital payments have impacted customer expectations. Electronic payments are fast and easy. Unfortunately, if a customer experiences payment issues, resolving the problemisn’t quick or simple. Bank customers expect three main things from their banks – efficiency, convenience and knowledgeable service. Efficiency means resolving my dispute quickly and don’t make me wait. Convenience means making the process simple for me and giving me digital options to enter and access information. Knowledgeable service means giving me the correct guidance or answer the first time.

The more manual a bank’s dispute management process, the wider the gap between customer expectations and the actual customer experience. With manual Reg E dispute management, the customer waits longer for what they need, has less visibility into the progress being made and has to invest more effort to understand the resolution process.

A bank needs to make it easy for the customer to file a claim. The customer needs to understand what’s next and when their dispute will be resolved. Actions or decisions must be communicated in a timely manner and explained clearly. Customers expect the ability to initiate and track a dispute online using the device of their choice, with a phone call or a branch visit. Generating a dispute should be an easy task that isn’t confined to traditional banking hours. After a dispute is initiated, customers want a resolution as soon as possible. It is essential for branch, call center and back-office employees to be empowered with a system that helps them easily provide timely information and dispute status updates to the customer while making the experience as seamless as possible.

The operational challenges of manual processing

The volume of Reg E disputes can vary greatly on any given day, and the demands of dispute management can stretch resources and monopolize focus. Whether the dispute process begins in a branch, call center or operations center, the resulting challenges ripple across the entire organization.

Despite the need to scale compliance, many institutions continue to rely on manual systems which can decrease accuracy, operational efficiency and business resilience.  Lack of automation can lead to simple rekeying mistakes which can trigger audits and non-compliance fines or oversight. As a result, operational staff can be overwhelmed with tedious work and are often unable to keep up. Training, retaining and engaging employees in meaningful work is more difficult without the use of process automation. Effectively reducing claim-related write-offs and losses is hard to achieve without enterprise-wide access to compliance data.

How Carmi, Illinois-based First Bank delivers a better customer experience with Reg E dispute tracking

With branches in Illinois and Indiana, First Bank of Carmi, implemented compliance process automation to help accurately track disputes and reduce the risk of fines, while also boosting efficiencies and improving customer service.

Before leveraging the workflow automation software, First Bank tracked disputes manually and that included compiling information through separate applications, such as Microsoft Excel spreadsheets and Adobe forms. Multiple interactions were needed between the customer and staff to move the process forward. Only after completing multiple, time-consuming stepscould the dispute be resolved.

Since implementing FINBOA’s Reg E Dispute Tracking solution, First Bank reduced claim processing time by more than 50%. Now, employees no longer waste time on inaccurate and inefficient manual methods but instead provide a valuable and enhanced customer experience. Staff could easily handle the rising volume of disputes, disputes flowed more efficiently and communication improved overall. In addition, First Bank applied e-signatures to the resolution process, which allowed customers to complete their actions more easily.Both customers and employees had a better end-to-end experience.

“From our customers’ perspective, we have made it easier for them to file and complete a dispute should they have fraudulent debit card activity. FINBOA has been very well received by our account holders with 64% taking advantage of the electronic signature option. The FINBOA team has been great. They are responsive, listen and understand our challenges, and they have implemented software changes to solve them. Since launching Regulation E Dispute Tracking in November 2018, we have had no Reg E timeline violations,” said Chris Bailey, First Bank’s Senior Vice President and Chief Technology Officer.

Automation changes the game

Automating complex compliance processes is a game-changer for improving the customer experience. Card fraud or unauthorized use is already a stressful event. Making the dispute resolution process as easy as possible for the customer is critical in delivering a positive customer experience. This means providing a convenient, intuitive and transparent process with fast resolution.

By using process automation to streamline Reg E dispute management, banks like First Bankcan provide their employees with the necessary tools to optimize internal compliance processes and put an end to time-consuming and manual tasks that affect the customer experience. Back-office automation can be instrumental in helping bank employees strengthen the customer relationship by providing the support and service customers need.

About Author:

Raj Singal is the CEO and founder of FINBOA, a leading innovator in compliance automation for financial institutions. Headquartered in Houston, FINBOA partners with banks and credit unions across the U. S. to achieve targeted business outcomes and peace of mind. With more than 30 years of experience, Singal is a purpose-driven leader who is passionate about delivering SaaS technology solutions that produce results and solve problems. He can be reached at

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