A quick look at our e-learning course data on The Development Zone shows that ‘Complaints Handling and the FCA’ was our most accessed course in August and it regularly finds itself in our top 5 courses. Complaints about a product or service are inevitable no matter what your line of business is, and the FCA is right to focus on how regulated firms manage their complaints, so I can understand why it is such a popular topic. Yet I do question how many firms put their staff through complaints handling training as a means to avoid falling foul of the regulator, rather than to proactively look at how we can learn from customer complaints and use this to improve how service can be delivered, a much more positive approach.
The cost-of-living crisis, Consumer Duty and fair value is still having an impact on the insurance consumer, and insurance is still one of the most complained about products to the Financial Ombudsman Service. *
It doesn’t always help that we regularly hear a focus on reporting the number of complaints rather than the outcomes of managing complaints, which is why it is so important that regulated firms take a more holistic approach to how they identify appropriate learning needs, and then train their staff to improve their complaints recognition and handling skills rather than how to simply avoid falling foul of the rulebook.
There may be a number of reasons that a consumer might complain about an insurance product or service:
- The consumer did not have the cover they expected when they bought the policy.
- The consumer has not had the levels of service that they expect when it comes to making a claim.
- The consumer did not understand the policy that they were buying, particularly the exclusions.
- The consumer is not happy with a renewal quote or the addition of new fees.
When we consult with firms from either a compliance or training and competency point of view, we recommend and support their staff to help them use complaints and the data collected as a means to look for trends, to increase their levels of training, and to identify gaps in their processes and procedures which can all be improved to make the customer journey better, which benefits everyone in the distribution chain. Training departments and learning & development managers can really get involved here to drive positive change within their organisations.
Regardless of the complaint itself, there is often behind it a customer who is in difficulty, may be experiencing vulnerability and who is likely to be experiencing a heightened state of emotion, and it needs the care of a member of your staff who has the necessary knowledge and soft skills to manage the situation calmly.
Complaints are a form of feedback, which can be used to assess outcomes, the main theme of the Consumer Duty, and they can present your business with an opportunity to identify common and unusual root causes that you can positively change, making sure that other customers don’t have the same negative experience in the future. Complaints can even highlight issues and errors in your processes that you have not yet identified yourselves, and some of these could be very easily rectified.
Not every complainant does it to search for compensation. It can be a genuine response to highlight and feedback dissatisfaction so that it doesn’t happen again. Where you learn from those complaints and make positive changes, make sure that you let the complainant know what you have done and the improvements that you have made.
If a customer can see that you have been supportive, have listened and have tried to support their complaint, then even with a negative outcome they will remember the service and transparency that you provided. This might be enough to keep them from moving to a competitor, and they may also talk about you positively to other people, leading to new business enquiries.
Dealing with complaints can be challenging. It requires good listening skills, and the ability to empathise with the complainant and to manage their expectations when the news that you are delivering is not always what they want to hear. It’s important that you create an organisational culture that doesn’t necessarily embrace complaints, but that makes it safe for customers to complain and for your staff to not see a complaint as something threatening and soul destroying. Being open and transparent with your customers shows that you take them seriously and it highlights a commitment to fairness and improving service that they will value.
The insurance sector has done a lot of work shifting the nature of complaints from a culture of blame and simple data recording to a culture of learning, and more can still be done to share and talk about where things are going wrong for consumers.
Not everyone is comfortable complaining, and there is a large cross-section of the consumer market whose voices are not being heard because they do not want to or do not have the ability to speak up, they may not want to create a fuss, or they may lack the confidence to complain about financial services products and services due to a lack of understanding or knowledge. Identifying not just who is complaining but rather who is not complaining is an important step that I would urge all firms to start considering.
Dealing with complaints effectively, making improvements, and learning from what went wrong is essential for any growing business. It leads to reduced costs and increased customer satisfaction. Fewer complaints can help to demonstrate positive results across all the four required outcomes of the Consumer Duty, particularly if you categorise your complaints properly.
Keep the customers that you have, and they will no doubt attract more for you. There is a lot that we can learn from that.
* Source: https://www.financial-ombudsman.org.uk/data-insight/annual-complaints-data/annual-complaints-data-insight-202223
This article was written for and published by T&C News Magazine (October 2023)