“Complaints! It’s easy, right?” As industry representatives, we often hear this. At its core, handling complaints is about addressing customer needs and restoring faith in the brand, epitomising ownership. However, to keep it “easy,” you need robust planning and implementation, which is anything but easy.

Drawing from my experience, this article outlines a strategic framework to help you navigate the complexities of consumer complaints handling, ensuring you are on the right path to success.

UNDERSTANDING REGULATORY REQUIREMENTS

In the UK financial services sector, managing consumer complaints requires adherence to regulatory frameworks such as the FCA’s Consumer Duty, DISP, CONC, and SYSC. Navigating these regulations confidently is crucial for producing a compliant function. Partnering with Compliance is essential; they are critical allies in developing and maturing a frontline complaints operation.

BUILDING A TARGET OPERATING MODEL

An optimal and effective Target Operating Model (C-TOM) must efficiently and compliantly address consumer complaints, inform the business of lessons learnt, and continuously improve process efficiency and control.

Key components of an effective C-TOM include:

1. Governance and Leadership

Establish clear roles and responsibilities, accountability structures, and oversight mechanisms. The board and executive leadership should prioritise customer outcomes, regularly review complaint trends, and challenge the business on complaint handling.

2. Complaint handling process

Implement a streamlined, customer-centric, and transparent process aligned with regulatory requirements. This includes triage, prompt acknowledgement, thorough investigation, clear communication, and an escalation process for unresolved complaints.

3. Regulatory compliance

Ensure full compliance with DISP, CONC, the Consumer Duty, and SYSC. Regularly train colleagues on regulatory requirements, integrate compliance into outcome testing, and conduct regular audits to ensure processes meet standards.

4. Systems and technology

Invest in a robust Complaint Management System (CMS) to centralise information, track complaint status, and generate reports. Utilise automation to streamline tasks and data analytics to identify trends and areas for improvement.

5. People and training

Right-size the team, hire individuals with the right skills, and provide comprehensive training on complaint handling procedures and regulatory requirements. Regularly review performance metrics and support colleague well-being.

6. Feedback and continuous improvement

Perform root cause analyses on resolved complaints, regularly review processes, establish feedback loops, and benchmark against industry standards. Use these combined insights to drive continuous improvement.

7. Engage with regulators and external bodies

Maintain clear communication and collaboration with the Financial Ombudsman Service (FOS) and the Financial Conduct Authority (FCA). Handle requests from claims management companies (CMCs) and professional law firms promptly and accurately.

8. Customer feedback and reputation management

Monitor online reviews and social media to staying informed about customer sentiments. Address negative reviews promptly and constructively. Maintain a watching brief on emerging issues.

9. Executive office escalation team

Establish a team to handle high-priority and complex complaints, ensuring swift resolution and executive oversight.

10. Process for vulnerable customers

Develop procedures for identifying and supporting vulnerable customers, provide mechanisms for signposting support services, and ensure complaint-handling processes can adapt to their specific needs.

By investing strategically in these areas and maintaining a proactive approach to customer feedback and reputation management, financial services firms can enhance customer satisfaction, ensure regulatory compliance, and maintain a competitive edge in the market.

Remember, effective complaint handling isn’t just about resolving issues; it’s about continuously learning and improving to provide the best possible customer experience. Read our upcoming White Paper on this very topic or speak with us directly if you would like to learn more about each constituent area outlined above.