What you need to know
Firms need be taking the opportunity to drive greater insights in the complaints handling lifecycle through compliance to ASIC's updated guidance on Internal Dispute Resolution (IDR) procedures.
Over the last few months there has been extensive consultation with consumer and industry representatives on how financial firms deal with consumer and small business complaints under their internal dispute resolution (IDR) procedures. ASIC has now released Regulatory Guide 271 Internal dispute resolution (RG 271) which looks to raise complaints handling standards across the financial sector, in particularly focusing on driving fair and timely outcomes for consumers and sharpen focus on systemic issues. With firms requiring to comply by 5 October 2021, this is a crucial time to review and assess capability across the complaints handling lifecycle including policy, process, operating model and culture. In particular however, this should be seen as an opportunity to uplift and leverage the power of data and analytics in complaints handling to drive greater insights into customer sentiment, all whilst complying with ASIC's regulatory requirements.
With stricter timeframes on the response to complaints, the ability to be able to record, track and monitor complaints becomes more important than ever. Workflow becomes a key enabler not only to the effective management, triage and tracking of complaints, but also to providing rich data for reporting that will support in understanding:
- How many days since the complaint was first raised and how many days before a response must be provided back to the customer?
- What is the current status of the complaint and how close is the complaint to be resolved?
- Which complaints are at risk of breaching ASIC's response timeframes?
- Which complaints are 'blocked' e.g. through internal appeals or escalations (i.e. multi-tiered IDR processes) which may put IDR compliance at risk?
- Where should IDR delay notifications be sent to customers if the complaint cannot be resolved in the required timeframe?
Through the right reporting, the answers to these questions will support with the effective management of operational complaints handling teams, for example through the ability to prioritise complaints and efficiently re-allocate handlers where they are needed most.
But the uplift of data capability in complaints should not purely be seen as a compliance exercise. This should also be seen as an important opportunity to harness the power of the data being collected through the complaints handling process to drive value across a number of areas including:
- Establishing mechanisms for the proactive continuous monitoring and analysis of complaints and complaints handling behaviour
- Improving the experience of customers and enabling a positive 'moment of truth’
- Collating live and direct feedback on the products and services provided to customers that informs continuous improvement in offerings to customers
- Identifying emerging risks and preventing potentially costly remediation by feeding potentially systemic issues into the issue management lifecycle and focusing on 'stopping the bleed' as early as possible
To enable this, there are a set of key analytics capabilities that if they exist in the organisation today should be assessed for their effectiveness, or if they don't exist should be explored further. These include:
- Ability to capture and track complaints data in a structured and process-driven way (e.g. through the use of workflow tools)
- Necessary technology and people to perform analytics and generate insightful and meaningful reporting
- Ability to overlay complaints data with additional data sources to perform trend and hotspot analysis. For example this can include linking complaints to:
- Product data (which in turn supports with compliance to ASIC's recent product Design and Distribution Obligations)
- Customer data including CRM systems to provide a single customer view of complaints, or to alert to vulnerable customers
- Process architecture to understand whether there are like processes in the organisation where 'unseen' issues may exist
- Capabilities in capturing and analysing unstructured data including voice and text. This extends to the ability to analysing and understanding tone of voice, customer sentiment and identifying expressions of dissatisfaction that may have otherwise been missed as a complaint
By harnessing the power of data analytics in complaints, organisations can ultimately provide better and fairer outcomes to the customer, drive value across the business, and all whilst satisfying ASIC's expectations.
Click here for more details on RG 271.
Author: Matthew Worsfold (Director, Risk Advisory).
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