Ever since the FSA came into existence, it has tried to improve complaints handling within the financial services industry.
Payment protection insurance (PPI) was a catalyst to push into force the tighter regulations that are now being introduced.
The FSA hopes that these rule changes will force a shift in the complaints handling culture in organisations, a move which the FSA has been considering for nearly ten years now.
It is no surprise to anyone within the financial services industry that complaints have risen again over the last six months.
Banks are now facing a perfect storm in terms of how they sell their products in the future due to PPI mis-selling, regulatory changes to complaints handling and the FSA’s tougher stance on overall financial regulation.
These new rules will affect the way that banks and major financial services firms will have to review their systems and processes in order to be compliant.
In the enterprise market, companies grown by acquisition often encompass a myriad of different business units, as well as an IT culture, that restrict radical change.
Furthermore, fixing process issues will also require cultural change.
A consistent approach to complaints will necessitate a thorough and clear view of complaints and the process changes and software capabilities needed.
It is not just the financial services sector that is being scrutinised about the way it deals with its complaints, with British Gas and NPower recently facing criticism for poor handling of customers’ grievances.
In any situation where large volumes of complaints recur, there is likely to be a root cause that needs to be addressed.
Many large institutions struggle with effective systems and processes in terms of identifying these root causes.
However, could culture be the real problem?
Systems and process changes are easier to change than culture. It is a given that culture starts at the top.
Companies must embed a new culture and must be willing and able to apply best practice.
They must accept that a programme of continuous improvement will need to form a core part of their normal day-to-day business activities, creating robust root cause analysis as well as meaningful management information (MI), to demonstrate that their complaints handling is in accordance with the FSA’s requirements.
Everyone dealing with complaints, from the call centres to the branches and online support teams, will need to be as prepared and highly trained as possible.
If the senior management make it clear that good complaints handling can offer valuable opportunities, this attitude will spread throughout the company.
A head of complaints should be responsible for overseeing the entire process and their seniority and clout should ensure that customer complaints cannot be treated as low priority.
The social media space is increasingly offering a perfect platform for the customer’s voice, be it negative or positive.
This is having a growing impact on the reputation and brand control of every organisation.
While it is not all about keeping the customer happy at all times, it is important to allow consumers to voice their complaints in a setting that allows companies to capture and respond to customer feedback in a way that they can control it.
This has made complaints handling all the more important.
Correct culture, systems and processes must all be in place for companies to be able to deal with complaints in social media, because of the potential damage to brand reputation.
All complaints must be dealt with quickly, before negative feedback about the brand can be spread.
One complaint can be re-tweeted, for example, and become visible to thousands in a matter of minutes. Customers have a much louder voice with the help of social media and all companies need to be diligent and fast-acting to protect their reputation.
What has become clear is that the underlying issues driving poor complaints handling need to be rectified as quickly as possible.
The right software, management and training can help with system or process failures and all of the other factors such as reputation management and tighter regulation will help to push a change in the culture of complaints.
Most companies will come at it from a system and process failure first, rather than culture.
However, culture is key to changing the way an organisation looks at complaints and its importance cannot be overlooked.
In addition, effective systems deliver significant efficiency gains of up to 50%.
A customer-focused culture delivers a more loyal and more satisfied customer base which will ultimately deliver a positive impact on the bottom line.