This means that, more than ever, complaints have become a risk management issue. But beyond regulatory obligations and cutting to the core of what the FCA is trying to achieve, complaints also have the power to positively impact the business. By identifying the root causes of customer service issues, and introducing remedial and process improvements, complaints can help the business to adapt and evolve.
Here, we set out the five key reasons why complaint management now needs to be prioritised and addressed in the boardroom:
1. The customer-centric culture – the company must demonstrate it has fully understood and implemented both the principles and cultural change that the FCA is expecting with the introduction of the Consumer Duty. With the objective of building all aspects of the business with the customer in mind, are you maximising the vital source of direct customer input that complaints and feedback offers?
Ask yourself if you can prove compliance with the Consumer Duty. Are the Management Information (MI) reports shown to senior managers and directors used not just to ensure outcomes are met but improved upon? Is MI used to guide strategic decision-making? Can you evidence where you have made improvements that directly benefit the customers as a result of their input?
2. Staff skills – to be adopted wholesale, company-wide, staff need to be trained in Consumer Duty principles. Every department, from marketing to sales, support, and management should have access to information on products, services, and customer liaison to avoid data silos and to enable this information to be used collaboratively.
Complaints-handling staff should have specialist training depending on their role in the process, with frontline staff trained to resolve issues speedily, and those handling escalations able to assess and compensate customers within the 8-week timeframe. Staff should be supported, managed, and trained appropriately to ensure they can offer suitable advice and discretionary decisions in meeting the regulatory criteria.
While complaint management can help implement these workflows, senior management needs to be able to assess and determine where additional staff resource and expertise is needed to help reduce complaints and escalations.
3. Damage limitation – Senior management are responsible for ensuring regulatory compliance and that the “business is adequately monitored and controlled”, according to the FCA. So all complaints should be recorded, monitored, reported and analysed by the company. Meeting these obligations reduces the risks associated with non-compliance such as public disclosure, fines, and suspension from service which the FCA has the power to enforce. Of course, some organisations may still exceed the threshold of 500 complaints in six months and find themselves in the public spotlight. It’s here where a top-down management approach comes into its own, ensuring that PR/Marketing and Sales are aligned to tackle the fallout of disclosure, proactively manage the service offering and reassuring the clientele.
4. Resolution and redress – Businesses must be able to assess and deal with complaints correctly to ensure they are meeting their remit under the FCA and to apply the correct level of compensation or redress.
For the business this level of insight is crucial. Customers whose issues have been classified as resolved or closed still have the right to take their case to the financial ombudsman. So if the organisation can prove due diligence, investigations can be resolved more quickly and may be in their favour. The senior management team must ensure it maintains oversight of complaints upheld and redress decisions to ensure it’s got the balance right.
5. Management Insight (MI) and oversight – MI can take various forms, from anecdotal to qualitative data, with examples including call or social media monitoring, sales complaints, and customer feedback. MI reports should be reviewed regularly i.e., at least monthly by the board, risk committees, and customer champions, and should be filtered down, through the business, to allow insight to be acted upon by departments who need to meet governance, risk, and compliance requirements.
With regards to complaint management, MI provides both immediate and future insights. It can be used to explore why complaints have occurred, with tools such as root cause analysis to identify systemic issues, and it can also be used to help steer the business going forward using forecasting and predictive analytics to help the business take steps to reduce complaints.
At the board level, MI can tend to be looked at retrospectively and many businesses fail to put in place a process to show how MI is assigned and actioned to create an audit trail.
It’s no longer acceptable to consider complaint reporting as a reactive post-sales function. Instead, complaint handling must become a dynamic process that permeates the business and informs senior management and their departments about where issues are occurring and how to mitigate these.
Yes, complaints are inevitable, and processes have to be in place to ensure these are resolved as speedily and favourably as possible. But complaints management can offer far greater value when it becomes a board level issue, such as:
- Oversight of the business and its operations
- Effective use of staff and system resources
- Auditable processes to demonstrate due diligence
- MI analysis to prevent complaint recurrence
- Future insight through trends and issues
Equiniti provides FCA-compliant complaint management and feedback reporting that can empower your business with improved management oversight and control. The solution embeds and provides evidence in support of the FCA’s Consumer Duty, management of any Data Subject Access Requests (DSARs) and delivers an internal Quality Assurance function, while tools such as root cause analysis allow data to be interrogated and used to improve operations.