United Kingdom
Learning From Complaints Makes Complaints Worthwhile - Tim Kirk
Offering a superior customer experience remains an area where many financial services firms are seeking competitive advantage. Consumer protection also remains a key priority for the FSA.
However, in the view of the FSA and the Financial Ombudsman (and according to much research, customers also), too many financial services companies are failing to respond properly to customers’ complaints. Providing a good customer experience after a firm makes a mistake (real or perceived), and meeting the requirements of regulators, means: making it easy for customers to complain, investigating all complaints fully and within a reasonable time, fixing or compensating for any loss or detriment suffered by the customer, and learning from the complaint to ensure other customers are not affected by similar issues.
The FSA stated that the recent failings by Barclays that led to a record fine of £7.7 million were compounded because Barclays did not take effective action based on what their complaints and internal analysis were telling them.
The FSA is planning to further strengthen its rules in the Spring to ensure that all firms understand that punishment will result unless customers’ complaints are dealt with fairly. This will include a focus on the need for firms to identify related trends and themes within overall complaints and to understand the root causes of these, as well as handling individual complaints well. Too often, root cause analysis can stop at a superficial level rather than digging deeply to understand the underlying causes.
Our team’s research and work with many companies has helped us to develop a framework encompassing the virtuous circle of listening to customer feedback, root-cause analysis and improvement action which the FSA expects firms to be following. Key steps are to:
- Measure and baseline your current performance across all stages of the customer journey, including complaints handling.
- Engage in dialogue with customers and front-line staff to learn about the areas of gain and points of pain in doing business with you.
- Analyse customer feedback and complaints to understand where service and product performance is disappointing your customers. Dig deeply into the data and avoid jumping to conclusions before considering the underlying issue and its root cause.
- Integrate analysis from different sources and different parts of the business into decisions and improvement plans.
- Act on the feedback and execute the decisions made.
- Share the action taken and results within your company and with your customers.
The FSA now expects to see evidence of this virtuous circle in action (including real improvement of the complaints process as a result), and then this knowledge being used to inform the improvement and development of current and new products and services.
BDO has advised many firms about making their customer and complaints processes work more effectively and are available to speak to you about how to improve customer experiences and satisfy new and emerging regulatory standards.
The FSA set a record fine with Barclays – but records are there to be broken, so take care to consider if your internal feedback loops are working as well as they could.
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