Customer Complaints Management in Financial Services
* A program of FS transformation around customer complaints management
*Complaint management is an increasingly important moment of truth The quality of complaint management is both a threat to, and opportunity for, the organisation. Risk Culture Customer Financial Major swing point for customer loyalty Retain customers vs cost of acquisition Reduce customer attrition Address issues at first point of contact to Valuable feedback & improvement reduce cost and effort opportunities Continuous improvement driving out costs Drive positive & avoid negative Social Media Reduce redress costs & fines Excellent Complaints Management Organisation Operational Motivated employees deliver better customer satisfaction reducing the causes of complaints Root-cause analysis drives continuous or handling them better at first point of improvement contact End to end Process designed for customer not Quality L&D for all customer facing staff on regulator avoiding backlogs complaints enables complaints to be a Customer centric KPIs reduce regulatory risk positive touch point
*More ways to register dissatisfaction, while customer expectations increase Expectations around customer service and experience are increasing as customers find new, more public ways to communicate their needs and issues to organisations
*Greater scrutiny by the ombudsman – no wish to top the league tables As results and rankings are more widely reported and become a subject of interest to more customers, firms are competing to not be top of complaints league tables.
*BUT issues dealt with successful can drive greater advocacy …as the person in question shares detail regarding the resolved issue with their social graph.
**A mindset change is required on the part of FS organisations
*From cost reduction and speed of resolution… ..to embracing and generating new value by successfully addressing customer issues Remedy % Wanted to get % What they got 1. Explanation of why problem occurred 73% 18% 2. Product / service fixed 72% 27% 3. Thank you for my business 71% 25% 4. Assurance problem wouldn’t recur 70% 16% 5. Apology 59% 25% 6. Chance to vent 59% 47% Top six wants of complaining customers (information sourced by Boxwood)
*A program of transformation around customer complaints management Executive Sponsorship •Core to customer & business strategy •Exec balanced scorecard Operating Model •Continuous Customer Culture reinforcement •Designed for early •Customer outcome resolution (high not risk focused FPOC) •Proactive CX •Easy to use systems •Always listening, & MI improving & •Drives teamwork communicating Excellent Root Cause Complaints Analysis Management Employee Culture •Accurate customer & •Empowered & complaint info trusted capture •Engaged & •Robust analysis supported •Findings welcomed & •Trained & confident actioned Measurement & Management Targets Information •Outcome driven at •Lead & lag indicators all levels •Single customer •Drives end to end reporting integrating trust & teamwork all feedback, research and MI •Delivers compliance as a by-product
*Root cause analysis that incorporates new real-time data sources Root cause analysis will incorporate new real-time data sources capturing customer issues at source, as they happen
*Operating model changes issues the underlying organisational resolve Before Complaint During Complaint After Complaint (escalation) Related On-going Activity Information about any Customer and colleague Customers know how to All information is history / activity related Confident and effective are updated on progress Feedback is given to (Potentially) increased access the bank and can recorded accurately into Complaint is turned in to to the complaint is interchange between through calls, emails text customer and colleagues complaints volumes are do so via channel of their a single system accessible a business opportunity recorded and accessible bank / customer etc in line with regarding their issues recorded choice by all staff by colleagues preferences Core customer Colleagues understand We have a clear Root causes of Customers understand Colleagues receive a We deliver a consistent Outcomes information is accessible the complaints handling Service and experience is understanding of root complaints are gradually next steps, timeframes warm hand-off when experience to by colleagues to simplify process and escalate consistent post hand-off causes underlying eliminated / mitigated and available options complaint is escalated commercial customers verification process where required complaints Ideal customer solution is The customer is happy Customers feel positive understood and with the redress given Customer feedback is Higher complaints about the overall appropriate redress given and the process was The complaint is resolved welcomed, shared and volumes are recorded experience and the where relevant quick and easy acted on relationship is enhanced The customer’s complaint is fully understood and a mutual understanding is reached Analysis is done on survey Ownership of the Back office colleagues Colleagues record all Flexible options are Customer understanding data to predict potential Colleagues record all complaint is taken as work to deliver the right Opportunities to improve customer information on available and are offered is updated, shared and complaints and address customer information on complaint moves through result for the customer – are flagged and feedback a single easy to use to the client to resolve used to develop and offer these before they a central system the system / is handed “what I do is for the end given Activity & Behaviour system the complaint solutions become an issue off customer” Everyone supports Colleagues take Colleagues are Diagnostic drop down Tools and information are Colleagues record all updating customer ownership for customer empowered to provide tool to help colleagues available and consistently complaints and systems information to ensure an issues and complaints appropriate redress at deal effectively with used to deliver quality are simplified up date single customer right across the bank first touch complaints view Colleagues express empathy towards Action is taken to Each best practice outcome relies on a number activities and behaviours being customer and ask what immediate impact the best outcome would relating to the complaint consistently delivered which in turn relies on a larger number of beliefs and behaviour be for them drivers being in place and reinforced by management. This can all be best summarised by the level of customer and employee centric culture Time is invested to gather all relevant information that exists in a firm We trust colleagues to The bank is aligned to Customer service and We all trust the Front line are We have an aligned set of make the correct deliver the promises We are all part of a Time spent on recording experience is a driver in complaints handling continuously developed KPIs that foster team judgment at first touch made to customers in line learning environment complaints is valued the complaints handling process and we use it and always improving working and trust in line Drivers & Beliefs and offer the right with the minimum process correctly with customer needs resolution standard Proper initial diagnosis of Customer feedback is a the complaint is The bank is aligned to valuable predictor of We have a feedback Drivers of internal conflict Customer relationships important to deal deliver any promise made Team working is valued future causes of culture in Commercial are continuously are rewarded effectively with the by the bank to resolve and rewarded complaints and can be and bank wide removed complaint and for future the complaint proactively managed RCA A customer-centric We resist the urge to Capacity is created to Customer complaints are approach to complaints We all know who to call We all trust each other police colleagues and enable colleagues to an important indicator of handling will delight our for help and know they and treat each other with empower them to deliver build lasting customer customer satisfaction customers and meet FSA will help me respect appropriate customer relationships requirements solutions
*Creation of a customer-centric culture – when, where and how the customer wants Processes around listening, responding and engaging with customers will be on their terms, where they are and in the ways that they find most appropriate
*Management of customer data - knowledge and insight in a single view Customer data will be managed in such a way as to provide customer knowledge and insight in a single view, creating a much more informed and personal relationship
*Measurement frameworks and targets that reward key value drivers for the organisation Measurement frameworks and targets will reward key value drivers for the organisation – stronger customer relationships, resolution of underlying service issues and better products Firm name Number of Number of Complaints Closed complaints complaints closed within complaints opened closed 8 weeks (%) upheld by firm (%) Barclays Bank Plc 146,316 155,257 96 52 Santander UK Plc 138,225 118,658 96 49 National Westminster Bank Plc 93,893 88,049 96 66 HSBC Bank Plc 65,441 73,333 94 35 Bank of Scotland plc 55,316 61,389 94 52 Lloyds TSB Bank Plc 51,586 64,508 95 59 MBNA Europe Bank Limited 37,292 39,530 95 42 The Royal Bank of Scotland Plc 35,361 33,327 96 56 Capital One (Europe) plc 21,117 18,969 99 4 Santander Cards UK Limited 18,161 18,314 98 27 Nationwide Building Society 17,892 18,269 99 47 Bank of Ireland (UK) Plc 11,250 11,044 91 43 Vanquis Bank Limited 10,918 11,250 99 35 Tesco Personal Finance PLC 10,226 10,240 95 63 The Co-operative Bank Plc 9,827 9,557 98 48 Marks & Spencer Financial Services Plc 8,369 8,188 99 29 Shop Direct Finance Company Limited 6,161 7,082 92 17 Clydesdale Bank Plc 5,311 5,118 86 36 Clydesdale Financial Services Limited 4,707 3,941 95 29 Ulster Bank Ltd 3,851 3,488 97 37 R. Raphael & Sons Plc 3,784 3,320 99 6
*Positive shift in customer lifetime value and brand reputation Financial Services have an opportunity to improve in terms of customer satisfaction & trust Source: UK Customer Satisfaction Index results January 2012 Source: UK Customer Satisfaction Index results January 2012
*Customers advocating the organisation due to these positive experiences Excellence in complaints handling drives advocacy and direct bottom line impact - even “Good” complaints handling has a negative impact on advocacy and results in lost revenue Cause to complain? Contacted Bank? How was it handled? Excellent complaint handling NPS 23% Had problem or complaint last 12 Total Customers ~1% Contacted Bank about months complaint NPS -28% NPS -29% Very Good complaint handling Total Customers 8% Total Customers 4% All customers NPS 0% Total Customers ~1% NPS 10% No problem or complaint in last Didn’t contact Bank about Total Customers 100% 12 months complaint Good complaint handling NPS 14% NPS -27% Total Customers Total Customers 92% 3% NPS -27% Total Customers ~1% Fair or poor complaint handling NPS -49% Source: Bain Analysis (Financial Services) Total Customers ~2%
*Greater operational and NPD savings from addressing root causes The cost of complaint handling in FS is higher than many other industries, in part due to the proportion of complex complaints but also as a result of the slow resolution times £140 Telecommunications £120 Public services Finance - banks and (national) building societies £100 Utilities Per 100 customers Cost of complaints £80 Public services (local) £60 Finance - Retail – non-food insurance Retail – food £40 Transport Automotive Leisure Tourism £20 £0 70 72 74 76 78 80 82 84 CSI Source: UK Customer Satisfaction Index – Cost of Complaints
*Fewer recurring complaints as organisation swiftly addresses root cause This example showing an issue that still has to be dealt with, after three years 2009 2012
*An opportunity to improve employee performance and job satisfaction …by using customer-facing staff in the solution design and delivery “Across industries and job types, we found that “In a sweeping meta-analysis of 225 academic people who fit our description of ‘thriving’ studies, Sonja Lyubomirsky, Laura King, and Ed demonstrated 16% better overall performance (as Diener found that happy employees have, on reported by their managers) and 125% less burnout average, 31% higher productivity; their sales are (self--reported) than their peers. 37% higher; their creativity is three times higher. They were 32% more committed to the organization My research shows that employees who score the and 46% more satisfied with their jobs. They also highest on providing social support are 40% more missed much less work and reported significantly likely to receive a promotion in the following year, fewer doctor visits, which meant health care savings report significantly higher job satisfaction, and and less lost time for the company.” feel 10 times more engaged by their jobs than people who score in the lowest quartile.” Source: Positive Intelligence by Shawn Achor Source: Creating Sustainable Performance by Gretchen Spreitzer and Christine Porath
*Key questions to ask What drives our complaints management – cost, risk, operational KPIs, customer feedback and experience, customer attrition? Are our complaints handling in line with our customer vision? What is our vision for complaints? How much do we invest in complaints handling training with the front-line and back office? How motivated are our complaints handling teams? Do we have some of our best people support our complaints? How often does the Exec team listen to complaint calls or contact upset customers? Do we believe being in the middle of the pack for FSA reporting on complaints is good for business? Are we confident that we get to the root cause of our complaints and our always address the reasons? What is our current attrition rate and is there a link with any of our complainants? When did we last have a robust complaint file review. What did it tell us? Are we consistently delivering TCF Outcomes 1, 5 & 6?