For the financially regulated business, complaint management is more than just a litmus test: it’s an essential tool in meeting the strict compliance regulations laid down by the Financial Conduct Authority (FCA). Meeting those obligations is becoming increasingly difficult due to wider data capture and the need to justify complaint outcomes.
Changes to the rules
Under the FCA’s Treating Customers Fairly (TCF) initiative, customer-serving retail or financial organisations are now required to provide detailed reports every six months cataloguing all customer complaints. They are also obligated to aggregate and act on Management Information (MI) in compliance with the six principles associated with TCF.
If over 500 complaints are received within that timeframe, this data becomes publicly disclosable, bringing the organisation under scrutiny, and any failure to deal with those complaints can lead to hefty fines.
It’s this need to provide greater transparency and more granular reporting that is fuelling the systemisation of complaints management. There’s now a real need to automate and document complaint handling to avoid recording errors and to prove compliance at every one of the seven stages.
The 7 Steps of Complaint Management
- Acknowledgement – FCA records for the first half of 2017 showed that 60 percent of complaints were resolved at the frontline within three business days, proving that the initial handling of a customer complaint can be vital in reaching a speedy resolution.
- Assessment – Complaints need to be classified using multiple criteria (ie product, line of business, customer etc), highlighting the need to ensure classification and correspondence procedures are automated.
- Planning – Redress should be assessed not just in terms of financial loss but also in the event of any distress and inconvenience caused to the customer. Prompts here can ensure the business communicates effectively with the customer.
- Investigation – Data must be analysed to extract MI. Using data analysis tools, Root Cause Analysis can be performed to determine causal factors and why customers are complaining.
- Response – Complaints are either resolved or escalated for settlement and a final response communication sent within eight weeks making it crucial that deadlines are flagged and observed.
- Review – Quality Assurance (QA) verifies if the business has met its TCF obligations and has communicated effectively with the customer and can be documented to prove due diligence.
- Improvement – As part of the QA process, the complaints process should identify learning outcomes. Any resulting actions can then be determined and future business services refined.
The systemisation of the complaint management process is driving change, requiring financial businesses to automatically capture, manage, track and report complaints to ensure a consistent and fair customer experience.
Yet the way the sector handles complaint reporting can vary dramatically, from businesses that use excel spreadsheets or even paper processes to those that use inhouse solutions to record customer interactions.
This patchwork of provisioning has led the FCA to note that “technology could make it easier for firms to meet their regulatory reporting requirements and improve the quality of information they provide” and it is now championing the idea of Regulatory Technology (RegTech) to ease the reporting burden.
A dedicated complaint management solution fulfils this role using sophisticated workflow to track and escalate individual complaints according to specific timeframes, classify the severity of the complaint and qualify it by context, send communications over multiple channels, and create that important MI to provide insight and improvement, all with one-touch reporting.
Today’s off-the-shelf complaint management solutions have minimal requirements, removing the issues of costly additional IT resource and the complexity of integration and deployment that made it the preserve of large corporates in the past. Available in the Cloud, as a SaaS or on-premise solution, complaint management is now within the reach of the SME.
MMX Compliance from Equiniti Charter is preconfigured to be FCA compliant and can be deployed rapidly, within days, enabling it to achieve compliance within two weeks, making it 86 percent quicker to deploy than rival solutions. It offers ease of installation, requiring limited IT resource and staff training, and integrates easily with existing CRM and ERP platforms.