Robust Complaint Identification and Management
An effective complaints process is vital for financial services organisations. Effectively managing the complaints process enables organisations to address customer dissatisfaction, resolve issues, and maintain trust. A well-structured complaints process ensures customers have a clear pathway to voice their concerns and allows organisations to respond effectively, fostering continuous improvement and regulatory compliance.
A critical first step in this process is complaint identification – the ability to recognise when a customer is expressing dissatisfaction, whether directly or indirectly. Proper identification is essential, as it sets the stage for all subsequent actions in the complaints process. Failure to accurately identify complaints can lead to significant issues, such as unaddressed customer concerns, missed opportunities for service improvement, and non-compliance with regulatory standards.
Balancing Undercapture and Overcapture
Complaint identification is one of the most common issues firms face in their approach to complaints management. It is the initial step in the complaints management process and involves recognising and logging any expressions of dissatisfaction, whether they are formal or informal. The challenge lies in striking the right balance between undercapture and overcapture.
Undercapture refers to the failure to identify and log legitimate complaints. This often happens when customers do not explicitly state they want to complain but infer dissatisfaction while meeting the materiality criteria.
Undercapture can result in a lack of data, making it difficult for organisations to identify systemic issues and leading to missed opportunities for improvement, which is a requirement within the Dispute Resolution (DISP) and Consumer Duty regulations. In addition, this impacts outcomes your customer will receive, either with the resolutions offered or by not receiving their escalation rights to the Financial Ombudsman Service (FOS). This also leads to firms under-reporting their complaint volumes to the FCA, which could lead to scrutiny from the regulator.
Overcapture, on the other hand, occurs when the complaint process captures issues that do not meet the FCA’s definition of a complaint. This can reduce the focus on genuine issues, divert resources, and create inefficiencies in the resolution process. Additionally, firms will be reporting and publicising a higher number of complaints than they are actually receiving. Overcapture also causes customers issues as it forces them through a potentially lengthy and formal complaint process instead of what could have been a simple and informal resolution.
The Consumer Duty Regulations
Regulatory frameworks, such as the FCA’s Consumer Duty regulations that came into force in July 2023, play a pivotal role in shaping the complaints management practices of financial services organisations. These regulations require firms to act in the best interests of their customers, ensuring that they provide fair treatment and avoid harm. Complaints and their management are a key litmus test of how a business performs against these standards.
Firms risk severe punishment for not adhering to these regulations and The FCA is continuously increasing the scrutiny on organisations, to ensure compliance with their new rules. The right complaints management system successfully articulates, trains and properly embeds the FCA’s definition of complaints (see above) bringing firms in line with the strict consumer duty regulations. At Forseti, we understand the intricacies of working within regulated industries. The Forseti platform supports compliance with FCA complaints handling and consumer duty regulations, it is workflow-compliant and aligned to FCA regulations so that businesses can meet their twice yearly FCA submission obligations.
Where we can help
For financial services organisations, a robust complaints management process is more than just a mechanism for addressing customer grievances. It is a vital component of regulatory compliance, customer satisfaction, and continuous improvement. By effectively identifying and managing complaints organisations can ensure they meet their obligations under DISP and Consumer Duty regulations, thereby maintaining a strong, trust-based relationship with their customers as well as enabling companies to learn from the complaints data and adapt processes to prevent systemic or recurring issues, thereby reducing costs.
We have experts on hand to help you shape the best complaint management process for you and your business, and to help you navigate this complex regulatory space. All whilst focusing on the needs of your customers and ensuring fair outcomes are achieved. In addition, our platform, Forseti, aligns with this “best practice” approach to complaint management. Forseti’s workflows support a seamless, smooth, end-to-end journey, where the customer is at the heart of everything you do.
Forseti helps provide visibility and focus on complaints within the three working day window, the initial timeframe the FCA allows for firms to resolve complaints less formally. The platform helps frontline teams and complaint teams have sight of when the window closes, has workflow configured to simplify the investigation and resolution journey, and finally automates the creation of the informal Summary Resolution Communication response letter, along with the more formal Final Response Letters.
For more information, or to get in contact with a member of our team about a free demo, click here: www.forseticomplaints.com/contact-us