Consumer Duty: Using Complaints Root Cause Analysis for Enhanced Customer Outcomes

It is now over six months since the implementation of the Consumer Duty (“the Duty”) at end of July last year. There has been a consistent theme in the regulator's publications over the last few months (Dear CEO letters, Consultations, website articles), the messaging has never been stronger, firms need to evidence that they are identifying potential harms and delivering good customer outcomes through their data and act quickly to address areas of customer harm.

The data needed to meet this requirement can be drawn from a variety of sources across your product lifecycle, and your complaints data is a rich resource - complaints handling has been firmly in the spotlight recently following the FCAs recent intervention in the Motor Finance sector (see our blog).  

Below we explore how firms are failing to utilise complaint Root Cause Analysis (RCA) as a tool that can help identify harms deliver the right outcomes and help shape Consumer Duty Board Reports. It is too easy to think that successfully and fairly handling a complaint fulfils your obligations. Work must not stop at the Final Response Letter, there’s so much more that needs to be done using data gleaned from your customer complaints. So where do firms so often go wrong? Here are our four practical considerations for you…

1 - RCA – System Capability:

As it’s a back-office process and isn’t income generating – commonly firms do not understand the importance of investing in their complaints management system capability. You need to have the functionality to “flag” or “categorise” what the root cause of a complaint is at a case level. This gives Firms the ability to quickly segment data and the quality of MI available to senior stakeholders within businesses.

You should have a consistent approach and methodology for conducting RCA, ensuring that this is supported through appropriate training for colleagues and suitable system capabilities.  

2 - MI & Reporting:  

Complaints handling MI is often too focused on the obvious big-ticket metrics for example, “Upheld vs Rejected”, “redress paid”, “FOS complaints”. Whilst these metrics are useful performance indicators – more granular and relevant data points need to be defined and sourced to help senior management get insight into RCA, trends and the quality of customer outcomes that are being delivered.

Defining the data points that should be included within complaints RCA and MI, that will enable the measurement of customer outcomes across the whole product lifecycle is invaluable.

3 - RCA Escalation & Analysis:  

Inadequate complaints MI is often compounded by a lack of appropriate escalation and analysis through the right governance forums. Far too often firms make mistakes such as only discussing complaints results at a high-level (e.g. number of FOS decisions). They are also often guilty of looking at results in operational silos, or without joining the dots on trends that might be occurring across the product lifecycle and the customer journey – for example, a high number of service level complaints about call wait times or claims uphold rates could be an indicator that price and value requires review.

Make sure that RCA is discussed at sufficient detail and at a senior level, between relevant stakeholders from across the operation and from all three lines of defence.

4 - RCA Feedback Loop:  

Finally, arguably the most important aspect of RCA and the most common mistake – is the failure of firms to use the complaints insight to feedback into process and product improvement - therefore failing to use it to facilitate the enhancement of customer outcomes.

RCA is invaluable information that can help firms evidence compliance across all four customer outcomes. Obvious questions to ask are:

• Products and Services – are customers satisfied that products are suitable for their needs?

• Price and Value – if our price reflects a benefit (for example access to staff or ability to claim) what should be done if the benefit is not being realised?

• Consumer Understanding – is unclear information driving customer contact?

• Consumer Support – do we get complaints more so during particular points of the end-to-end journey?

Firms must ensure that complaint handling processes do more than improving individual outcomes for the complainants, use RCA insights to improve product offerings and ensure they meet the needs of their target market.

As a stark reminder, we are rapidly approaching the requirement for Firms to produce their inaugural Consumer Duty Board Reports (31 July 2024). Firms need to be thinking now about what MI and data they will need to enable senior stakeholders and the regulator to monitor performance against the consumer duty requirements. So, if you want more information on how to develop an effective complaints management framework with value-add RCA, or broader help the consumer duty or the Consumer Duty Board report - then please contact us.  

We have a highly skilled team who specialise in complaints, conduct, culture and governance who are second to none.  

Please do get in touch to understand how we can help.

Drop me a line, Will@avyse.co.uk