Turning the tide – Complaints lessons for Financial Services

Complaints are on the rise in Financial Services.

The FCA’s latest data (Oct-23) reports a 5% increase in volume between H2-22 and H1-23, and with regulatory pressure heightened across the industry – how can companies transform their approach to prevention and resolution?

We explore this in our first Operational Insight for Financial Services, drawing on client successes to help diagnose and manage complaints challenges, including lessons from a recent project delivering £7.5m in-year benefit.

What’s driving the increase?

Whilst current accounts and credit cards remain two of the most complained about products, the impact of the macroeconomic environment has resulted in a significant rise in complaints about pensions, investments, and insurance.

Furthermore, given the FCA recently announced its investigation into unfair interest rates for car loans (pre-January 2021), we could see an influx of cases involving firms with large car finance arms, including Lloyds, Santander and Barclays.

How are customers complaining – and what’s the impact?

As customer propensity to complain increases, so does the likelihood that voice will be the chosen channel to lodge complaints.

Recent research from Auriemma found that filing a complaint is an area where preference for voice chat is on the rise, and with the backdrop of the Consumer Duty implementation, there is an increased expectation that firms resolve these contacts efficiently and effectively.

Given that voice contacts are often inefficient and carry a higher cost to serve, the need for an effective and robust service model, reliable, repeatable processes and an empowered workforce is more important than ever for operational and business leaders.

Why are companies struggling?

We see organisations underperforming in complaints resolution as a result of:

• Struggling to accurately identify a complaint and ensuring customers are directed to the right support
• Limited capability for first time resolution, leading to elevated handling times and multiple complaint touchpoints
• Outdated technological infrastructure which makes a comprehensive complaint investigation difficult and time consuming
• Inaccurate logging and reporting, limiting the opportunity for insightful conclusions and potential automation
• Rising complaint volumes with ineffective treatment strategies failing to address and solve root causes
• An ambiguous complaint handling intent leading to inconsistent customer outcomes
• Ineffective core skills training/competencies, failing to set the workforce up for success

Struggling in any of these areas can have a significant impact on the business, and can lead to:

• A backlog of complaints requiring urgent intervention
• Low employee engagement from a highly pressurised environment
• High sickness and attrition resulting from burnout
• Regulatory breaches and reputational damage
• Further complaints about the resolution process itself
• Poor outcomes for customers who need your help

Lessons from the front line

In our energy retail practice, we recently undertook a complaints transformation for a large supplier, who’ve shared the following lessons:

• Nail the operating rhythm – build the habits and consistency for success
• Get broader buy-in, this is a company wide problem to solve
• Move past MI reporting and into actionable insight
• Create urgency, and use agile ways of working
• Bring your outsourcers closer, and improve speed to competency
• Get your team to set and own goals to drive performance

“BFY were brilliant at creating the operating rhythm for the recovery programme – we all recognised it would be challenging, but we were in this together as one team. The BFY team set the pace and helped my team see that what were trying to achieve was possible.”

“We had to get our broader Senior Leadership team clear and bought in on the upstream problems that were driving complaints, and have some tough conversations around accountability and performance – we’re one company, but unless you really make the effort you often don’t feel like ‘one team’ when you work in different functions. Using Operational Excellence techniques like ‘Going to Gemba’ (Visiting the shop floor) really brought to life upstream process failures.”

“You need to get actionable insight quickly. With the BFY team we would run sprints based on the top actionable root causes – creating urgency to deal with a batch of common root complaints, working and influencing upstream to fix the processes, and building sustainable capability to permanently keep the inflow volumes down.”

“Many suppliers have outsourced large parts of their operation, and we were no different. Many of the outsourced team were inexperienced – by bringing them closer to the onshore operation we were able to accelerate their speed to competency. Having the BFY team here to facilitate feedback and coaching was invaluable.”

“Don’t have crazy targets – it’s really easy to over promise based on top-down pressure. We worked to get buy in and commitment each week from the team – they would then be incredibly passionate about achieving a goal they had set as a team. If I’d solely relied on top-down assumptions from my planning team we wouldn’t have achieved what we did, as the top-down assumptions assume every complaint is an average – rather than a customer with a unique (but often common) problem.”

“Our project was a massive success – we delivered £7.5m of in year benefits.”

Looking for more?

At BFY, our Complaints and Operational Excellence team can help to enhance your focus on prevention and resolution, driving improvements in agent outcomes, processes, and ultimately improving overall customer service.

If you’re curious about our methodology for improved complaints performance, and how it can be applied in Financial Services, contact Josh Marlow.