Ensuring Five-Star Complaint Handling Excellence

Today, most financial organizations have a robust complaint management process in place, but will it be enough for tomorrow? The past couple of years have resulted in not only a rise in complaint numbers but an increase in customer expectations too, creating a perfect storm of complaints for financial services organizations to manage.

As well, the complaints that are being escalated to the Financial Ombudsman Service (FOS), a figure that has risen 58% year-on-year, are indicative of past practices, the impact of older decisions playing out in today’s complaints. In a similar vein, what we see tomorrow, will be a reflection of the practices of today.

So, with all this in mind, if you’re looking to go beyond a tick in the compliance box, fulfilling compliance obligations whilst focusing on customer experience (CX) and operational excellence, what steps do you need to take to ensure that all-important five-star complaint handling not just for today but for the foreseeable future? And, what have other businesses done in an effort to improve their complaint handling capabilities?

Reducing FOS Referral Rates

To achieve quality outcomes, mitigating against referrals to the FOS, you need to instill quality across your complaints processes. However, defining a one-size-fits-all standard for quality is nigh-on impossible, dependent on so many different factors, many of which will be personal to your business. That’s not to say that making some changes won’t have a dramatic impact on quality, reducing FOS referral rates in the process. Take customer communications for example. Many complaints and escalations in particular can be avoided by higher quality customer communications. Better management of customer expectations builds trust and nurtures patience in the place of frustration. Similarly, if you focus on individual customer circumstances, ensuring a more nuanced, personalized approach, monitoring interactions carefully and making necessary corrections, quality outcomes are far more likely.

This was exactly what happened with a leading UK merchant banking group. It prioritized quality by undertaking real-time quality assurance (QA) and taking a risk-based approach to case reviews. What resulted was comprehensive QA management information (MI) which was then able to pinpoint where improvements could and should be made. This led to a 21% reduction in FOS referrals in six months; enhanced MI, and much improved engagement with the FOS.

Navigating First Point of Contact Resolution

We all know that speed doesn’t always equate to quality outcomes, but it’s an undeniable fact that in many cases, first point of contact (FPOC) resolutions are preferable. Research shows that 75% of customers will remain as customers if you achieve a resolution within a week. Stretch this to three-to-four weeks and there’s a 50-50 chance your customers will go elsewhere.

What’s standing in the way of FPOC resolutions is a combination of factors, none of which are insurmountable. A culture of empowerment and engagement is a must if you’re to have a team of case handlers who can achieve FPOC resolutions; a culture that can be built with the right training program, not to mention the hiring of employees for behaviors and not just previous complaint handling experience. The right tools and information are crucial too, equipping case handlers with the systems and templates—where appropriate—needed to underpin swift, effective resolutions. Finding the right balance between speed and quality is what counts.

This was definitely the case with a global health insurance group who undertook a thorough review of its operating model to try and improve on its FPOC resolution rate that just couldn’t seem to rise above 10%. The business was struggling with a large complaint backlog, not to mention a poor CX record. By rebalancing skills and expertise across the frontline and making FPOC resolutions a priority, the business reshaped its operating model to great success. The focus on eradicating the skills and engagement gap through professional development and training across all areas of the complaint journey increase FPOC resolutions to more than 30%, as well as improving case handler productivity and lowering staff attrition rates.

Navigating Resolution Timeframes

Not unrelated to the issue of FPOC resolutions is how you can optimize resolution timeframes. Just because the Financial Conduct Authority (FCA) calls for complaints to be resolved within eight weeks doesn’t mean that you need to take the full eight weeks. It’s a deadline, not a target. But with customer expectations increasing all the time, and complaint volumes showing no sign of decreasing, managing and prioritizing complaints efficiently and quickly is proving to be problematic, resulting in businesses taking longer than the mandated eight weeks.

Whilst there isn’t a silver bullet, a total case management approach is becoming more commonplace, with cases ‘owned’ early on in the process and managed end-to-end by a named individual.

For one large UK insurance provider this was the way forward. The business was challenged by an ageing case profile. The organization didn’t differentiate between simple and more complex cases, with all complaints, regardless of complexity, put into the same waiting list. As the business grew, the number of older complaints increased, with new complaints facing a long wait just to be allocated, never mind resolved.

The business revamped its case management processes, moving to end-to-end case management, with clear and early case ownership and the rapid identification of those ‘simpler’ cases, which certainly didn’t need to be languishing in a waiting list when early resolutions were more than probable. As well, more complex cases were progressed earlier on in the process too.

Ultimately, the business reduced the age profile of complaints by 14 days, with simpler cases resolved in days rather than weeks, all of which served to improve CX considerably too.

Navigating Consumer Duty

The FCA’s Consumer Duty, set to come into effect in April 2023, will certainly have a major impact on your complaint handling. The onus is on financial services businesses to demonstrate and evidence how they are ensuring customers are making the most of their money, delivering products and services that underpin sound financial decisions. For many businesses, knowing where to start is often the biggest hurdle, with uncertainty surrounding just what information is needed. In reality, organizations often already have the information needed to meet the requirements of the Consumer Duty, they just don’t know how to access it and use it to its full potential.

This is where it’s crucial to unlock the true value of your complaints data, using your established processes, such as voice of the customer, root cause analysis and complaints information, to firstly identify any gaps in your data, and, secondly, to identify which priority areas demand attention.

A leading UK motor finance lender went through a similar exercise a couple of years ago. It had over 10% of its complaints being referred to the FOS, with a 60% FOS uphold rate. Not only was it clearly not achieving the right outcomes for customers but it didn’t have access to the right MI to identify where service improvements needed to be made.

By overhauling its complaints operating model, the business transformed its complaint handling. Through a combination of people, process and technology, working with the Aptean Respond complaints management system, a dedicated MI team established consistent and accurate processes right across the complaints function. What resulted was a single version of the truth when it came to complaints data, with the option to drill-down into comprehensive management reports to understand where the problems were occurring, laying the foundations for true data-driven decision-making.

The success of the project speaks for itself, with FOS referral rates down to just 2% and FOS uphold rates slashed to 24%.

As financial services businesses strive to go beyond the norm with regards to complaint handling, building a culture of continuous improvement is key. Aptean Respond can sit at the heart of this new culture, delivering not only the functionality but the insight needed to take your complaint handling to the next level, underpinning five-star complaint handing today ready to meet the challenges of tomorrow.

For more information on how Aptean Respond can help your business to deliver five-star complaint handling, contact us today.