How to handle complaints in the financial sector
Complaint management is a crucial aspect of customer service and risk management in the financial sector. Financial institutions — such as banks, insurance companies and investment firms — are subject to various regulations and standards that require them to handle complaints fairly, effectively and transparently.
It’s important to understand regulatory expectations for complaint management in the financial sector. Here are common expectations, plus best practice recommendations for improving customer satisfaction and trust.
Regulatory requirements
Depending on the jurisdiction and the type of financial service, different regulators and agencies may oversee the complaint management process of financial institutions. For example, the Consumer Financial Protection Bureau is responsible for enforcing federal consumer protection laws and supervising the complaint handling of banks, credit unions, mortgage lenders, debt collectors and other financial service providers. The National Association of Insurance Commissioners handles complaints against insurance companies and the Financial Industry Regulatory Authority investigates complaints against investment firms.
Some of the common expectations for complaint management in the financial sector are:
- Establishing and maintaining a clear and accessible complaint policy and procedure that informs customers of their rights and obligations, the steps and timeframes for resolving complaints, and the available channels and options for escalating complaints.
- Providing adequate training and resources to staff who are responsible for receiving, investigating and resolving complaints and ensuring that they act in a professional, courteous and impartial manner.
- Acknowledging and registering complaints promptly and providing customers with regular updates and communication throughout the complaint process.
- Conducting a thorough and fair investigation of complaints and providing customers with a clear and reasoned explanation of the outcome and the rationale behind it.
- Offering appropriate and proportionate remedies or redress to customers who have suffered harm or loss due to the financial institution's actions or inactions and implementing them without undue delay.
- Keeping records and data of complaints and their resolutions.
- Monitoring and reviewing the complaint management process and performance and identifying and addressing any systemic issues, trends or areas for improvement.
Best practice recommendations
In addition to complying with the regulatory expectations, financial institutions can also adopt some best practice recommendations for enhancing their complaint management process and improving customer satisfaction and trust. Some of these recommendations are:
- Promoting a positive and proactive complaint culture that encourages customers to voice their concerns and feedback and values complaints as an opportunity for learning and improvement.
- Providing customers with multiple and convenient channels for submitting complaints, such as phone, email, online forms, social media or in person options.
- Empowering front-line staff to resolve complaints at the first point of contact, whenever possible, and providing them with the authority and discretion to offer remedies or redress.
- Seeking customer feedback and satisfaction on the complaint process and outcome and using it to measure and improve the quality and effectiveness of the complaint management.
- Benchmarking and comparing the complaint management performance and practices with other financial institutions and adopting the best practices and innovations in the industry.
- Engaging with external stakeholders, such as consumer advocates, ombudsmen or mediators to seek their input and advice on the complaint management process and policies and to resolve complex or escalated complaints.
How Wipfli can help
If your institution finds it needs help with the complaint management process, Wipfli can help. We understand that complaint management is a vital part of customer service and risk management in the financial sector, and we can help you adopt some best practice recommendations to enhance your processes and improve customer satisfaction and trust.
Financial institutions are expected to handle complaints in a fair, effective and transparent manner and to comply with the regulatory requirements or expectations and standards that apply to them. Wipfli delivers the real-world experience you need to stay up to standards. Visit our regulatory compliance services page to learn more.
Related content:
Tips for mastering accurate CECL regulatory reporting
