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FCA thematic review of complaint handling - Financial services: Regulation tomorrow complaint definition fca

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United Kingdom (and EU regulation) FCA thematic review of complaint handling By Laura Hodgson on December 4, 2014 Posted in Insurance, United Kingdom

The FCA has published the findings of its forward looking thematic review i enulxjpo. moncler jacket mens ioffernto complaint handling across 15 major retail financial firms including three general insurers and three life insurers. The FCA also invited five trade bodies to take part in the review and sought input from the Financial Services Ombudsman and consumer bodies.

Rather than examining firms’ compliance with FCA rules and uncovering poor practice, this thematic review sought to identify changes that can be made to ensure that the interests of consumers are at the heart of firms’ complaint-handling processes in the future. The aim of the review was to identify common themes and barriers to prevent effective complaint handling in the five key stages of firms’ complaint handling:

Identifying a complaint Recording a complaint Internal reporting of a complaint Provision of redress Carrying out root cause analysis.

The FCA found that firms have taken steps to improve their complaint handling and found examples of firms involving senior managers more in the complaint handling process and encouraging staff to make the right judgements. Weaknesses were identified in each of the five stages, however, and firms can do more to deliver fair complaint handling and consistent outcomes for consumers. The FCA’s observations together with firms’ self-assessments and working groups led to the conclusion that there are four main barrier themes: application of FCA rules; cultural; operational; and specific barriers in relation to management information (MI) and root cause analysis.

Next steps

The FCA notes that both actions from all regulated firms as well as regulatory actions may be required to address the barriers identified in the review. All firms should consider how the FCA’s findings relate to their own complaint-handling operating models, policies and practices. Firms may like to consider:

Whether complaint handling policies and processes have the interests of consumers at their heart; avoiding a tick-box approach to compliance with Dispute Resolution: Complaints (DISP) rules. Reviewing their definition of ‘complaint’ and training staff accordingly. Whether systems and processes could inhibit accurate recording of complaints. Observations made about consistency of redress and distress and inconvenience payments. Their approach to root cause analysis focusing on the observations in the thematic review. Whether any improvements to MI can be made.

In addition to action for firms, the working group recommended changes to DISP rules which will potentially enable the industry to provide better complaints experiences and outcomes to consumers. The working group proposals also include reconsidering firms’ biannual reporting of complaints data to the FCA. The regulator is conducting further research in light of these recommendations with a view to developing policy proposals which will be consulted on in due course.

For further information:

TR14/18 Complaint handling, November 2014

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mens moncler bob hat UK : Complaint Handling | The Importance Of A Strategic Approach To Complaint Reduction Last Updated: 8 October 2015 Article by Nicholas Kemp Deloitte Your LinkedIn Connections at Firm

Complaint reduction should be a priority for every firm. A robust and structured complaint reduction strategy can deliver many advantages, for example:

The customer experience is improved as issues which could have caused complaints are identified and resolved. The morale of front-line staff can improve if they are given the knowledge and skills to resolve customer concerns before they become complaints. The potential to reduce reputational risk through the identification and elimination of common complaint causes, leading to less likelihood of negative regulatory or media activity. A potential reduction in complaint processing costs as incoming volumes, ombudsman referrals and re-worked complaints decrease.

In our experience, not all firms have a fully co-ordinated approach to complaint reduction meaning the impact of any current reduction activity may not be delivering its full potential.

The purpose of this blog is to consider the component parts which form a) the foundation of a successful complaint reduction strategy and b) the complaint reduction strategy itself.

Setting the foundations

In order to reduce complaints a firm must first understand its complaint population. Accurate complaint identification is critical especially if the follow-on improvement activity is to be correctly focussed. For more information on this please refer to our blog on 'implementing the complete FCA complaint definition' .

Complaint identification should be supported by an intuitive complaint categorisation process.  Staff, who log complaints, should be given categorisation options which are intuitive, clear and easy to understand and are not duplicated (or else there is a risk of data fragmentation). The categorisation options also need to provide  the business with useful and tangible information about the complaint – e.g. what actually went wrong. The options need to be set at a level of detail which is reasonable for the user to know at the point of entry. Where the complaint logging system has  tiered complaint categories, i.e. Primary, Secondary and Tertiary, they should ideally adhere to the following logic:

What area of the business went wrong?  > Which part went wrong? > Why did it go wrong?

Robust root cause analysis, with engagement and accountability for remedial and improvement activity at a senior level across all business areas, enables firms to focus on issues which are causing real customer detriment.

A successful complaint reduction strategy

There are three pillars to any successful complaint reduction strategy.

1. Senior accountability for delivering the strategy

There should be a firm-wide culture to reduce complaints. This culture needs to be driven by senior management with targets for complaint reduction success metrics and customer satisfaction scores agreed at an executive level. Targets should be challenging but achievable with appropriate controls to ensure they do not drive or encourage the wrong behaviours.

2. Using root cause analysis intelligence to best effect

Accurate complaint identification and categorisation should lead to more accurate intelligence becoming available for areas of the business which make customer-impacting decisions, e.g. risk, product development, etc. This can be used to inform future decisions to ensure they are tailored (as far as is commercially possible) to minimise complaints. For example:

A credit card provider's RCA MI illustrates that if it reduces the credit card limit for a population of customers, the firm can expect 60 complaints per 1,000 affected accounts. Deeper analysis of this data identifies that half of the complaints were not in relation to the reduction of the limit itself but the manner in which the reduction was implemented, e.g. the customer had insufficient time to make alternative arrangements, only one notification of the reduction was sent, etc. This intelligence can then be used to inform and improve how any future limit reductions are implemented. This could not only reduce the number of complaints but also provide an improved customer experience.

3. Staff knowledge and empowerment

Things unfortunately will go wrong even in the best run business. Sometimes these problems and their causes are not promptly communicated to front-line staff. This can lead to customers' queries escalating to complaints because staff are unable to provide a satisfactory explanation and response.

Firms should consider implementing a robust mechanism which promptly informs all front-line staff of any issue which may lead to complaints and provides them with information on the cause of the problem, what the firm is doing to rectify it and how to recompense any impacted customer.


By taking a strategic approach to complaint reduction firms can ensure that their financial and resource investment in this area delivers the greatest benefit to customers.

Further, with the FCA publishing all complaints data from June 2016, meaning all complaints received by a firm and not just those closed after the third business day will be published, any reduction activity could mitigate the reputational risks this may present.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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Deloitte blog on implementing the complete FCA complaint definition Published on August 26, 2015 Nicholas Kemp Follow Following Unfollow Nicholas Kemp Sign in to follow this author

Senior Manager at Deloitte

In both CP14/30 and PS15/19 the FCA stressed that it expects firms to only report complaints which meet their full Handbook Glossary definition.

In this blog we share some good practices that firms, which currently apply a wider definition, may want to consider when implementing the full complaint definition:


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