Making Customer Complaints Handling A Priority In Financial Services

Tue, 18 Jun 2019 09:22

Making Customer Complaints Handling A Priority In Financial Services Image

Complaints data published by the Financial Conduct Authority (FCA) in 2018 reveals that customers of regulated financial services organisations complained over 8 million times last year. The data also shows a pattern of successive rises in complaints in the past few years.

With a series of failings, be it mis-selling scandals or IT outages, it is clear that customers of the financial services industry are unhappy and not shy about complaining. The focus should, therefore, be on how to handle customer complaints and what businesses can do to resolve complaints quickly and efficiently.

A Costly Affair

Mishandling customer complaints is proving very costly to the financial services industry which paid out £2.75bn to compensate unhappy customers. While the compensation amounts can vary case by case, the stakes are set to rise even further. The FCA announced that from 1 April 2019, the Financial Ombudsman Service (FOD) are now able to require financial services firms to pay significantly more compensation to consumers and businesses - more than doubling the figure from £150,000 to £350,000.

Bad Reputation

Then there is the loss of reputation which will most likely have an impact on retaining customers and attracting new business. Figures showed that more than 20,000 customers left TSB between April and June 2018 in the wake of their IT meltdown. With such a reputation, businesses are also facing stiff competition. Focusing on improved consumer satisfaction, challenger Fintech players such as Monzo are revolutionising the financial services industry, capitalising on providing quick hassle-free services which are easy to set up and use.

It is therefore vital that businesses and organisations within the financial services industry make customer complaints handling a priority.

What Does the Regulation Say?

The FCA handbook defines a "complaint" as an oral or written expression of dissatisfaction, justified or not, from a person (or on their behalf) about a financial service or redress. Complaints at financial services organisations could range from mis-sold services, such as PPI, to customers affected by outages, such as the one at TSB. Customers are also using various channels to reach out with complaints including written letters, phone, email and social media.

When a business receives a complaint, the FCA regulations require customer services staff to:

  • ACT (acknowledge, confirm and take responsibility) as per the Dispute Resolution Handbook;
  • document each step of the process;
  • resolve complaints within set time frames;
  • and undertake root cause analysis (RCA) to understand the cause of recurring complaints.

When all else fails and an organisation has failed to resolve the complaint to the satisfaction of the customer, the customer could refer the complaint to the FOS – which could result in compensation awarded to the customer.

Improving Complaints Handling

The bottom line is that organisations must expect complaints from customers. The focus should be on alleviating the effect of those complaints while ensuring compliance with the FCA regulation and keeping the complaint from being referred to the FOS.

A robust complaint handling procedure is a must so that organisations can deal with customer complaints as per the guidelines set by the regulator (FCA), learn where they are going wrong and help reduce the volume of complaints in the future.

At the forefront of the complaints handling procedure are the staff. So, training staff on FCA Compliance to understand the significance of regulated complaints - and how to manage them – is also important. Make sure staff are aware and prepared to follow procedure and are taking all the necessary steps required to resolve complaints in reasonable time frames.

Happy customers are the lifeline of any thriving business. And while things may sometimes go wrong, the right attitude, conduct and timely resolution could help you resolve complaints to the satisfaction of your customers and in line with regulation.

* Aggregate complaints data 2018 available at the FCA website.

Get in Touch

When you send us a message one of our friendly, knowledgeable eLearning experts will contact you as quickly as possible

* Required Field

Get in Touch

Get in Touch

+44 (0)1509 611 019

We'd love to talk to you about how we can help. Please leave your details below and a member of our team will get back to you.

* Required Field