Complaint handling: under the spotlight. EY point of view

Transcription

1 Complaint handling: under the spotlight EY point of view

2 New rules on complaint handling On 23 July 2015, the UK s Financial Conduct Authority (FCA) issued its Policy Statement (PS15/19), in response to CP14/30, setting out the changes to complaint handling rules aimed at improving complaint handling within the industry, and access for customers to the Financial Ombudsman Service (FOS). The new rules which come into effect on 30 June 2016 will change and include: Identifying and handling complaints Extension of the next business day rule to the close of a complaint is resolved within three business days, but would have to send the complainant a summary resolution communication. Firms will therefore have a longer period to consider less complex complaints without having to handle them within a more formal process. This development is likely to require system changes and additional training for staff currently handling non-reportable complaints. irrespective of the length of time taken to resolve the complaint, and must be included in the revised complaints data returns. Complainants would be allowed to refer any complaint to the We want to ensure that the process of complaining is straightforward, transparent for consumers to have effective access to the FCA CP14/30 Call charges basic rate telephone numbers for customers who wish to contact them about existing contracts, as well as to complain. consumers calling premium rate numbers are redirected to new numbers that comply with the new rules. Transparency complaints data The FCA is introducing a new complaints return, which will to provide data on all complaints received. The complaints return will be revised with a new list of categories of complaints, set against product and service groupings. Customers will also be able to refer their complaint to the FOS without having to wait for the current eight-week period to elapse. EY believes the recent intense focus on complaints provides the catalyst outcomes for customers. 1 Complaint handling: under the spotlight

3 Getting it right at every stage staff or specialist complaints staff are engaged at the right stage. We expect all complaints to be FCA PS15/19 identifying, recording, internal reporting, provision of redress and root cause frameworks and by doing this to improve consumer relationships. complaints at all points of receipt; i.e., not just contact centres Are there adequate mechanisms in place for recording a complaint? 4. Provision of redress 1. Identifying 5. Root cause analysis 2. Recording There should be complaint management systems in place at the earliest stage. Firms would need to ensure that their be accessed at a later date. They should categorise complaints appropriately, e.g., by product type and nature, and the complaint handling process should be automatically instigated once a complaint is recorded. 3. Internal reporting Firms should ensure that the reporting mechanism for complaints enables a smooth hand-off to take place without compromising customer experience. They should question whether their process allows for the correct teams to deal with complaints. How do we ensure staff are appropriately identifying a complaint? Firms will need to evidence that staff are appropriately trained to understand what a complaint is and are able to adopt the behavioural change required to record all complaints correctly, including those that previously would have been resolved early and not reported. a complaint? Maintaining a strong governance and control framework is critical in allowing appropriate information to be escalated quickly to senior management. The new regime for senior managers means there is greater personal accountability, to ensure that appropriate action is taken, and that business models create an appropriate culture for dealing with complaints. Good-quality insightful MI is key to ensuring that senior management know that complaint handling is delivering fair outcomes. The changes in the way that complaints are to be reported along with the new three-day resolution time staff training. Complaint handling: under the spotlight 2

4 Getting it right at every stage Firms will need to review their business models to assess senior management oversight in the approach to complaint handling. Firms will need to review whether their performance management process is adequately designed to ensure that appropriately addressed. Accurate categorisation of underlying complaints reasons will more sophisticated root cause analysis. To enable them drive this aspect of their complaint handling. of redress? Firms must ensure clear guidelines are in place for the provision of consistent redress payments. They should review the adequacy of processes in place to ensure, where an offer requires redress or a distress and inconvenience (D&I) payment or both, the amount offered is fair and reasonable. This is orientated complaint handling functions, typically across multiple sites. First point-of-contact staff should be empowered to provide an immediate resolution of complaints where appropriate. Firms should consider whether their redress policies and processes ensure fair outcomes are arrived at and are not too prohibitive or subjective. incorporate FOS learnings? Firms must be able to demonstrate they are using wider sources of data to undertake effective root cause analysis and develop their root cause capabilities to drive product and service improvements, using relevant data. Firms should also be taking a more holistic view to assess whether the business model or culture constitutes a root cause of complaints. FOS and internal data must be adequately analysed for trends between complaint causes, with learnings from root cause analysis fed back in to the business to improve practices and provide evidence of such improvements. Firms must be able to react quickly to systemic issues to ensure they are prioritising the fair treatment of customers. Effective root cause analysis will have implications for performance management of staff to ensure training is effective, as well as on the adequacy of risk management systems and processes to identify whether issues could have been picked up earlier. on the quality of complaint handling and have effective channels for escalation. The MI should be insightful and the commentary relevant and clear, focussing on the delivery of fair customer outcomes and the customer experience. Firms should assess whether adequate processes are in place, including quality assurance, for management to assess the investigation and resolution processes, including whether policies and procedures are correctly followed and that appropriate customer outcomes are achieved. 3 Complaint handling: under the spotlight

5 reasonable outcome, taking into account legal requirements, regulatory What does success look like? the required changes and have: Up-to-date systems and processes running. All complaint handlers fully trained and aware of the responsibilities for delivering a robust complaints process. Undertaken a full gap or issues analysis, identifying and in place to address them. A robust and appropriate approach to delivering fair customer outcomes. A comprehensive root cause analysis methodology, with clear evidence of learnings being applied. A suite of relevant and insightful MI with a clear and robust process for escalation and appropriate change in products and processes. Complaint handling: under the spotlight 4

6 Impact and considerations Firms need to consider the wider organisational impact on their business and make the required changes. First point-of-contact staff, previously dealing with nonreportable complaints, will need to be: Trained and empowered to undertake more in-depth review of less complex complaints. Trained to assess the difference between an enquiry and an expression of dissatisfaction where the complainant has material inconvenience. management system. Provided with the ability to issue summary resolution communications to customers. Firms should assess their current next business day complaints process to determine whether it is able to deliver an effective review of less complex complaints within three business days under the new requirements. All contact centre and customer-facing staff will require training on the new requirements, in particular the change to the causation categories, to allow them to undertake initial analysis of complaints and escalate correctly when required. As the FOS will be allowed to review complaints resolved the review of these complaints to ensure fair outcomes for their customers. Reporting The requirement to report all complaints received is likely to when published, the report could prompt increased media attention. Firms will therefore need to agree and prepare their communication strategy. comply with our reporting rules and consistently poor practice may be subject to supervisory or FCA PS15/19 Firms will need to record and report complaints data using the new complaints return for any reporting period ending on or after 30 June 2016, and will need to have systems in place to do so. Firms with a year-end accounting date of 31 December new requirements. Data system changes In order to comply with the new complaints return process, to comply with the new return. From 9 July 2015, the FOS will only have the discretion to dismiss a complaint in the more limited circumstances permitted by the ADR directive. One new grounds for dismissal has been granted under the directive to deal with complaints that seriously impair the effective operation of the ombudsman service. The FCA has stated that the effect of the revised grounds introduced by the directive is not materially different to what exists other than the introduction of this new one. The FOS will now have the discretion to review complaints that Firms will need to consider what their response policy would be for requests made from the FOS to review such complaints. Firms will need to update their complaints returns process to enable them to extract the appropriate data required by the regulators for the FCA s new complaints return. The new complaints website, giving consumers the complete tools to make a complaint, will simplify the process for customers and is likely to drive an increase in formal complaints. 5 Complaint handling: under the spotlight

7 How EY can help EY is a leader in conduct risk and has recent experience based testing. such risks. We have strong relationships with the FCA and can bring insight on all new complaint-related issues. In particular, we can help you to develop and review compliance arrangements in key areas, including: Implementation of a managed service support including. Testing fair outcomes in complaints. Designing an appropriate redress framework. Redrafting complaint handling policy and procedures. File reviews and call monitoring. of their MI and data enabling them to overcome the challenges of legacy systems. Providing an independent view, supported by quantitative and qualitative data to benchmark against industry peers. complaint handling framework. Implementation of a managed service support including: End-to-End handling of specialist complaints e.g., FOS complaints. QC & QA support for complaints handled in-house or offshore. Complaints handling packages, tailored and scaled Designing target operating models. Reviewing remuneration and inducement policies. For more information on how EY can help, please contact: Abigail Viljoen Associate Partner, Financial Services Risk T: E: aviljoen@uk.ey.com Sajedah Karim Director, Financial Services Risk T: E: skarim1@uk.ey.com Jenny Clayton Partner, Financial Services Risk T: E: jclayton2@uk.ey.com Michael Scoular Partner, UK FS Managed Services T: E: mscoular@uk.ey.com Complaint handling: under the spotlight 6

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