As the Government considers their next steps following their regulatory consultation that closed in November, the Treasury should shortly be announcing how legislation covering BNPL products is set to change. The expectation is that the FCA will develop a specific set of rules for these products which will come into effect in early 2026.
In the meantime, whether your company is already partially regulated or will soon be under full regulation, it is crucial to be proactive in meeting the standards required by the FCA, including those surrounding complaints handling and the Consumer Duty.
EQ Customer Resolutions has been supporting financial services firms with their best practice complaint handling operations for 30 years. Here is our simple and effective checklist to ensure your complaints handling operations not only meets FCA approval, but also helps to improve customer service and satisfaction.
7 step best practice complaint handling action checklist
1. Acknowledgement
Automated acknowledgements can be hugely beneficial to both business and consumer, letting the consumer know they have been heard whilst not taking up the valuable time of complaint handlers. It is also important to enable and empower front line workers to take affirmative action for the complainant to solve their problem. FCA records for H2 2020 showed that just 49% of complaints (excluding PPI) were closed within three business days, showing there is room for improvement during this vital first engagement.
2. Assessment
The correct classification of a complaint and logging all the information is vital in achieving a positive outcome. Simply asking what a good desired outcome for the complainant would be, and striving for that, can help set expectations on both sides. These systems can streamline the entire process by classifying, recording and tracking cases, ensuring that each one progresses smoothly according to predefined workflows. By using such systems Case Handlers are provided with relevant and tailored advice reducing manual effort and human error.
3. Investigation
The FCA has very clear guidelines on complaint handling, revolving around their Treating Customers Fairly (DISP) principles. This means that companies can automate and standardise their regulatory complaint processes to deliver consistent, high-quality results. This can include collecting all details, templates and prompts for appropriate and legally binding communication with the customers. A good system should be able to provide a detailed and organised record of interactions, activities and responses. This ensures if a customer needs to escalate an issue, there is a clear, transparent history available to facilitate resolution.
4. Communication and Engagement
Complaints can escalate unnecessarily if customers are not engaged or the outcome is not communicated correctly. Communication and engagement throughout the journey is critical, including setting expectations in updates and response times, and following best practice approach to have a decision call before issuing the final response letter. This is recommended for both uphold and reject outcomes (remember, escalations to FOS can still occur if the complaint is upheld). Holding a decision call ensures the customer understands the rationale behind the outcome, gives an opportunity for the customer to ask any questions, and helps the business land the outcome more sensitively than you can with a formal letter.
5. Speed of Response
Complaints are more likely to escalate if they are not responded to quickly. Typically, satisfaction reduces significantly after the first 10 days, especially if there has been little contact/engagement. Timely and clear communications with the customer play a vital role in keeping the relationship positive even in the middle of a complaint. In addition to the regulatory mandated responses to be sent at set deadlines, updates let the customer know you are both taking them seriously and consider them important. It is not just the official, legal and formal responses that can be automated. It is helpful to include an array of automated templates within your complaints system, saving time and effort for complaint handlers, as well as offering the customer clarity at each stage of their complaint.
6. Review
Keeping on top of trends can make a real difference to effective complaint handling. Early identification of common complaints can be acted upon quickly to prevent them increasing or becoming a regulatory/compliance issue. Making the most of your systems to review MI, undertake data analysis, and identify Root Cause Analysis can determine causal factors and to help understand why customers are complaining. A robust Quality Assurance (QA) process also verifies if the business has met its TCF obligations and ensures this can be documented to prove due diligence and compliance.
7. Improvement
It is not enough to just know where things are going wrong, the vital step is to act on this information. Whether problems are highlighted before or after a case goes to the Ombudsman, all complaints are potential opportunities to review and improve products, operations and communications. A proactive approach to continuous business improvement also has a hugely positive impact on your relationship with the regulator and ombudsman, as well as being key to maintaining loyal, happy customers.
Secret of a well-handled complaint
Well-handled complaints rely on getting the right people, processes, data and technology working seamlessly together. A well-handled individual complaint involves combining the efficiency of automation with the personal touch that only expert customer service people can bring. To optimise your whole complaint handling operation for regulatory oversight, these two components need to work alongside defined processes and data analytics, to deliver the required information to the regulator, and also identify areas for improvement to the business itself.
Find out more about how we support all customer-facing and complaint-handling operations or get in touch to arrange a no-obligation conversation with one of our consultants about optimising your current processes.