Leveraging CFPB complaint database     analysis to improve customer experience                                  Brandon Pu...
Imagine If you could…     …detect and                                            …identify key       …identify competitors...
Discussion agenda• Background on the CFPB• Analysis results• VOC and complaint management• Next stepsBeyond the Arc, Inc. ...
Discussion agenda• Background on the CFPB• Analysis results• VOC and complaint management• Next stepsBeyond the Arc, Inc. ...
Since its inception, the jurisdiction of the CFPB hasgrown to include many products and services•     Bank accounts•     B...
The CFPB has also expanded the types of financialinstitutions that fall within its purview•     Large banks and their affi...
Financial institutions paid over half a billion dollarsin 2012Institution                        Payment                  ...
Research is clear: increase in revenues for cardissuers driven by improved experience                                 Tota...
How does this affect banks, credit unions and otherfinancial institutions?• Financial institutions are now subject to more...
Introduction to the CFPB Database• Last year, the CFPB made its database of consumer credit card  complaints available to ...
Several key variables in the database can help adddepth to analysis•     Company•     Issue•     Submitted via•     Date r...
Discussion agenda• Background on the CFPB• Analysis results• VOC and complaint management• Next stepsBeyond the Arc, Inc. ...
Top 10 companies scaled by number of cards incirculation                                                                  ...
Top 10 issues based on total database complaints                                                                          ...
Top 5 companies – trended                                                                              January 2012 – Dece...
Top 5 issue trends for 2012                                                                                               ...
Capital One and Amex experienced peaks incomplaints around the time of their fines                                        ...
Top companies with untimely responses toconsumer complaints                                                               ...
Ranks of companies that extend monetary relief                                                                            ...
Top issues that result in monetary relief                                                                              Jan...
Beyond the Arc collects social media and financialservices data for analysis and reporting• Our Social Customer Insights s...
We discovered a correlation between Discover’sbilling dispute complaints and social media                                 ...
Billing dispute complaints peaked in July andOctober                                                                      ...
A peak in social media comments about Discover               bills preceded a spike in complaints                         ...
Discover billing dispute comments• my discover credit card bill is due tomorrow and their  site isnt working #lovely• Q&A:...
Similarly we noticed a correlation betweenCitibank APR complaints and social media                                        ...
Citibank APR complaints peaked in June                                                                              Januar...
Social media comments about Citibank APR show a               sharp spike in May                                          ...
Citibank APR sample comments• Hows this for cynical capitalism. Rang up Citibank to  pay-off and close my credit card. The...
Many companies have voiced their concern aboutthe CFPB and the complaint databaseConcerns about the database:•Complaints a...
Discussion agenda• Background on the CFPB• Analysis results• VOC and complaint management• Next stepsBeyond the Arc, Inc. ...
How do customer problems become complaints?                                                        Bank addresses         ...
How can we identify and address these issues sothey don’t escalate?                                                       ...
We need to focus on collecting, analyzing, andtracking customer feedback                                                  ...
Voice of the Customer analysis is the key topreventing feedback from escalating• Voice of the Customer (VOC) analysis allo...
What is VOC?A Voice of the Customer program uses text analytics to turnyour unstructured data into structured data…so you ...
Key steps to strengthening Voice of the Customer   Define                        1. Define your VOC strategy   Listen     ...
Include external measurements to create anintegrated view of the customer   Internal                                      ...
Measuring your results is the key to a successful VOCprogram• Determine key metrics        – # of CFPB credit card complai...
Discussion agenda• Background on the CFPB• Analysis results• VOC and complaint management• Next stepsBeyond the Arc, Inc. ...
How can your company leverage the CFPB databaseand VOC analysis• Analyze and track the CFPB complaint database on an ongoi...
A little about us         Strategy                               Analytics                        Insights                ...
Questions?Beyond the Arc, Inc. | Management Consulting & Strategic Communications   43
Thank you                                  Brandon Purcell, Analytics Team Lead                                    Nick Ba...
Disclaimer and copyrightThis document was prepared by Beyond the Arc, Inc.This document provides our commentary and analys...
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WEBINAR: Leveraging CFPB Complaint Database Analysis to Improve Customer Experience

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Our free webinar highlights how data analytics can identify key issues early on and uncover emerging trends to help banks and credit unions reduce compliance risk, enhance Voice of the Customer efforts, and increase customer satisfaction.

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WEBINAR: Leveraging CFPB Complaint Database Analysis to Improve Customer Experience

  1. 1. Leveraging CFPB complaint database analysis to improve customer experience Brandon Purcell, Analytics Team Lead Nick Baldocchi, Assistant Analyst Beyond the Arc, Inc. Beyond the Arc Monthly webinar seriesBeyond the Arc, Inc. | Management Consulting & Strategic Communications January 31, 2013
  2. 2. Imagine If you could… …detect and …identify key …identify competitors’ address regulatory customer pain strengths and risks before they points to improve weaknesses? result in costly the customer fines? experience and drive retention? Our analysis of the Consumer Financial Protection Bureau (CFPB) credit card complaint database can help you identify key issues early on and uncover emerging trends to reduce your risk and costs.Beyond the Arc, Inc. | Management Consulting & Strategic Communications 2
  3. 3. Discussion agenda• Background on the CFPB• Analysis results• VOC and complaint management• Next stepsBeyond the Arc, Inc. | Management Consulting & Strategic Communications 3
  4. 4. Discussion agenda• Background on the CFPB• Analysis results• VOC and complaint management• Next stepsBeyond the Arc, Inc. | Management Consulting & Strategic Communications 4
  5. 5. Since its inception, the jurisdiction of the CFPB hasgrown to include many products and services• Bank accounts• Bank services• Credit cards• Credit reporting• Money transfers• Mortgages• Student loans• Vehicle or consumer loansBeyond the Arc, Inc. | Management Consulting & Strategic Communications 5
  6. 6. The CFPB has also expanded the types of financialinstitutions that fall within its purview• Large banks and their affiliates• Credit unions (above $10 billion)• Nonbanks• Residential mortgage companies• Payday lenders• Private education lenders• Credit reporting agenciesBeyond the Arc, Inc. | Management Consulting & Strategic Communications 6
  7. 7. Financial institutions paid over half a billion dollarsin 2012Institution Payment Date ReasonCapital One $210 million July 18, 2012 Deceptive marketing practicesDiscover $214 million Sept. 24, 2012 Deceptive marketing practicesAmerican Express $112.5 million Oct. 1 2012 Illegal credit card practicesBeyond the Arc, Inc. | Management Consulting & Strategic Communications 7
  8. 8. Research is clear: increase in revenues for cardissuers driven by improved experience Total Churn Add’l Word of revenue reduced purchases mouth potential Temkin $246M $91.8M $82.3M $72M Forrester $307M $83M $213M $12M • Incremental purchases from existing customers in the same year. • Revenue saved by lower churn. • New sales driven by word of mouth.Beyond the Arc, Inc. | Management Consulting & Strategic Communications 8
  9. 9. How does this affect banks, credit unions and otherfinancial institutions?• Financial institutions are now subject to more stringent regulatory requirements – Regulatory creep• Consumers now have multiple avenues to voice complaints• Companies need solid complaints management process to avoid costly regulatory exposure• What if we could identify and address complaints before they become complaints, or even worse, regulatory issues?Beyond the Arc, Inc. | Management Consulting & Strategic Communications 9
  10. 10. Introduction to the CFPB Database• Last year, the CFPB made its database of consumer credit card complaints available to the public• It was made public “to improve the transparency and efficiency of this essential consumer market” (CFPB)• In 2012 the CFPB database contained: – 15,056 complaints – 76 different financial institutions• http://www.consumerfinance.gov/complaintdatabase/Beyond the Arc, Inc. | Management Consulting & Strategic Communications 10
  11. 11. Several key variables in the database can help adddepth to analysis• Company• Issue• Submitted via• Date received• Zip code• Company response• Timely response?• Consumer disputed?Beyond the Arc, Inc. | Management Consulting & Strategic Communications 11
  12. 12. Discussion agenda• Background on the CFPB• Analysis results• VOC and complaint management• Next stepsBeyond the Arc, Inc. | Management Consulting & Strategic Communications 12
  13. 13. Top 10 companies scaled by number of cards incirculation January 2012 – December 2012Beyond the Arc, Inc. | Management Consulting & Strategic Communications 13
  14. 14. Top 10 issues based on total database complaints January 2012 – December 2012Beyond the Arc, Inc. | Management Consulting & Strategic Communications 14
  15. 15. Top 5 companies – trended January 2012 – December 2012Beyond the Arc, Inc. | Management Consulting & Strategic Communications 15
  16. 16. Top 5 issue trends for 2012 January 2012 – December 2012 Total number of complaints each monthBeyond the Arc, Inc. | Management Consulting & Strategic Communications 16
  17. 17. Capital One and Amex experienced peaks incomplaints around the time of their fines January 2012 – December 2012 Paid $210M on 7/18 Paid $113M on 10/1 Paid $214M on 9/24Beyond the Arc, Inc. | Management Consulting & Strategic Communications 17
  18. 18. Top companies with untimely responses toconsumer complaints January 2012 – December 2012 *Minimum 30 complaintsBeyond the Arc, Inc. | Management Consulting & Strategic Communications 18
  19. 19. Ranks of companies that extend monetary relief January 2012 – December 2012Beyond the Arc, Inc. | Management Consulting & Strategic Communications 19
  20. 20. Top issues that result in monetary relief January 2012 – December 2012Beyond the Arc, Inc. | Management Consulting & Strategic Communications 20
  21. 21. Beyond the Arc collects social media and financialservices data for analysis and reporting• Our Social Customer Insights service: – Contains over 336 million social media posts from • Twitter • Facebook • Industry blogs and forums – Related to the top 100 banks and credit unions – Over the past 18 months – About 800,000 posts a dayBeyond the Arc, Inc. | Management Consulting & Strategic Communications 21
  22. 22. We discovered a correlation between Discover’sbilling dispute complaints and social media January 2012 – December 2012Beyond the Arc, Inc. | Management Consulting & Strategic Communications 22
  23. 23. Billing dispute complaints peaked in July andOctober January 2012 – December 2012Beyond the Arc, Inc. | Management Consulting & Strategic Communications 23
  24. 24. A peak in social media comments about Discover bills preceded a spike in complaints January 2012 – December 2012Social Media CFPB Beyond the Arc, Inc. | Management Consulting & Strategic Communications 24
  25. 25. Discover billing dispute comments• my discover credit card bill is due tomorrow and their site isnt working #lovely• Q&A: When the hell am I supposed 2 pay my discover card bill?• i feel so good when I pay my credit card bill. discover be harassing me way before my bill is due.Beyond the Arc, Inc. | Management Consulting & Strategic Communications 25
  26. 26. Similarly we noticed a correlation betweenCitibank APR complaints and social media January 2012 – December 2012Beyond the Arc, Inc. | Management Consulting & Strategic Communications 26
  27. 27. Citibank APR complaints peaked in June January 2012 – December 2012Beyond the Arc, Inc. | Management Consulting & Strategic Communications 27
  28. 28. Social media comments about Citibank APR show a sharp spike in May January 2012 – December 2012 CFPBSocial Media Beyond the Arc, Inc. | Management Consulting & Strategic Communications 28
  29. 29. Citibank APR sample comments• Hows this for cynical capitalism. Rang up Citibank to pay-off and close my credit card. The lovely lady in the Phillipines asked me why and I said: your interest rate is far too High (21%) and she said Well Im now willing to lower your rate because you are such a valuable customer .....Well if thats the case, why didnt you drop it earlier?‘• Now that I am close to paying off almost all of my credit card debt, it feels so good to tell these credit card companies they have to drop my interest rate to something competitive… Citibank can kiss my a$$ with their terrible outsourced customer service.Beyond the Arc, Inc. | Management Consulting & Strategic Communications 29
  30. 30. Many companies have voiced their concern aboutthe CFPB and the complaint databaseConcerns about the database:•Complaints are not verified for accuracy•Not representative of the population as whole•Cannot determine if complaints are related to dissatisfaction ormisunderstanding terms of service•However, analysis of issues in the CFPB can help you determinewhere the customer experience is falling shortBeyond the Arc, Inc. | Management Consulting & Strategic Communications 30
  31. 31. Discussion agenda• Background on the CFPB• Analysis results• VOC and complaint management• Next stepsBeyond the Arc, Inc. | Management Consulting & Strategic Communications 31
  32. 32. How do customer problems become complaints? Bank addresses Bank addresses Resolution Resolution problem problem Customer Customer Customer Customer Files complaint Files complaint experiences a experiences a provides provides with CFPB with CFPB problem problem feedback feedback Customers often try multiple time to resolve and / or their problems Bank does not Bank does not Closes Closes address address account(s) account(s) problem problemBeyond the Arc, Inc. | Management Consulting & Strategic Communications 32
  33. 33. How can we identify and address these issues sothey don’t escalate? Bank addresses Bank addresses Resolution Resolution problem problem Customer Customer Customer Customer Files complaint Files complaint experiences a experiences a provides provides with CFPB with CFPB problem problem feedback feedback Customers often try multiple time to resolve and /or their problems Bank does not Bank does not Closes Closes address address account(s) account(s) problem problemBeyond the Arc, Inc. | Management Consulting & Strategic Communications 33
  34. 34. We need to focus on collecting, analyzing, andtracking customer feedback Bank addresses Bank addresses Resolution Resolution problem problem Customer Customer Customer Customer Files complaint Files complaint experiences a experiences a provides provides with CFPB with CFPB problem problem feedback feedback Customers often try multiple time to resolve and /or their problems Bank does not Bank does not Closes Closes address address account(s) account(s) problem problemBeyond the Arc, Inc. | Management Consulting & Strategic Communications 34
  35. 35. Voice of the Customer analysis is the key topreventing feedback from escalating• Voice of the Customer (VOC) analysis allows you to: –Identify customer pain points to improve the customer experience and drive retention –Detect regulatory risks and address them before the CFPB takes punitive actionBeyond the Arc, Inc. | Management Consulting & Strategic Communications 35
  36. 36. What is VOC?A Voice of the Customer program uses text analytics to turnyour unstructured data into structured data…so you can quantify what your customers are talking about foranalysis and take actionBeyond the Arc, Inc. | Management Consulting & Strategic Communications 36
  37. 37. Key steps to strengthening Voice of the Customer Define 1. Define your VOC strategy Listen 2. Listen to the VOC Analyze 3. Analyze and track customer feedback Report 4. Report on the findings Act 5. Act to improve the customer experience 6. Measure results MeasureBeyond the Arc, Inc. | Management Consulting & Strategic Communications 37
  38. 38. Include external measurements to create anintegrated view of the customer Internal Social Regulatory Data from across the Social media about you Customer complaints enterprise and your competitors o Customer feedback o Twitter o Federal o Frontline notes o Facebook o State o Transactional data o Blogs o CFPB o Behavioral data The CFPB database is a meaningful data source to incorporate into your VOC programBeyond the Arc, Inc. | Management Consulting & Strategic Communications 38
  39. 39. Measuring your results is the key to a successful VOCprogram• Determine key metrics – # of CFPB credit card complaints – # of untimely responses – Volume of credit card related customer feedback – Call volume to credit card customer service• Translate metrics into ROI – i.e. Savings = (Reduction in call volume) * (average call time) * (employee hourly wage)Beyond the Arc, Inc. | Management Consulting & Strategic Communications 39
  40. 40. Discussion agenda• Background on the CFPB• Analysis results• VOC and complaint management• Next stepsBeyond the Arc, Inc. | Management Consulting & Strategic Communications 40
  41. 41. How can your company leverage the CFPB databaseand VOC analysis• Analyze and track the CFPB complaint database on an ongoing regular basis• Calibrate your VOC program to identify customer irritation and problems before they escalate• Enhance your VOC program by adding new internal data sources as well as external sources like social media to get a clearer picture of the customer experience• Use VOC data to drive customer experience improvements and take action, then measure resultsBeyond the Arc, Inc. | Management Consulting & Strategic Communications 41
  42. 42. A little about us Strategy Analytics Insights Action Highlights and credentials Recent press • Recognized by Forrester Research among 15 • Loyalty Magazine, Summer 2012 top firms in Customer Experience Consulting • Destination CRM, May 2012 • Social media panelist, BAI Retail Delivery • American Banker/Bank Technology News, Annual Conference 2012 Jan 2012 • Faculty Fellow, Pacific Coast Banking School, • BAI – Retail Banking Strategies, Jan 2012 August 2012 • ABA Banking Journal, Jan 2012 • Featured speaker on VOC best practices, Text Analytics World 2011 • CUES, Credit Union Management, Jan 2012 • Featured speaker on social media data • Social Business Today, Customer mining, American Bankers Association 2011 Experience Management @ TMC.net, and numerous blogs and online publications42 Beyond the Arc, Inc. | Management Consulting & Strategic Communications 42
  43. 43. Questions?Beyond the Arc, Inc. | Management Consulting & Strategic Communications 43
  44. 44. Thank you Brandon Purcell, Analytics Team Lead Nick Baldocchi, Assistant Analyst Steven J. Ramirez, CEO Beyond the Arc, Inc. Office 310.913.3802 Email sramirez@beyondthearc.com Digital beyondthearc.com @beyondthearc Facebook.com/beyondthearc Slideshare.net/beyondthearcBeyond the Arc, Inc. | Management Consulting & Strategic Communications 44
  45. 45. Disclaimer and copyrightThis document was prepared by Beyond the Arc, Inc.This document provides our commentary and analysis. The information contained herein is ofa general nature and is not intended to address the circumstances of any particular individualor entity.Although we endeavor to provide accurate and timely information, there can be no guaranteethat such information is accurate as of the date it is received or that it will continue to beaccurate in the future. No one should act on such information without appropriate professionaladvice after a thorough examination of the particular situation. No warranty expressed orimplied.The information provided in this presentation is not intended nor should be used as asubstitute for legal advice or other expert opinions and services in specific situations.This material may not be distributed.Other company, product, and service names may be trademarks or service marks of others.Beyond the Arc, Inc. | Management Consulting & Strategic Communications 45

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