Member Article

Reality of customer complaints experience at odds with financial services providers' perception of service

Major new research from Huntswood provides insight for financial services firms, drawn from responses from over 5,500 consumers and intensive interviews with business leaders

• 60% of financial services firms believe their customers are satisfied with their complaints handling, while only 22% of customers actually report that they are satisfied • 43% of firms believe they are resolving complaints at the first point of contact, while only 20% of customers claim that their complaint was resolved immediately • 84% of customers said that they would change financial services provider as a result of a poor complaints experience

UK financial services firms are underperforming when it comes to complaints handling, despite their growing belief that customers are satisfied with their performance.

This is according to new research by regulatory and complaints handling experts, Huntswood. Published today, Huntswood’s Complaints Outlook 2019 builds on its landmark 2016 report to provide a comprehensive picture of complaints handling performance across the UK. It combines research from financial services and utilities firms with survey responses from over 5,500 consumers. The nationally representative survey was carried out by Huntswood’s research partners, YouGov.

Since the release of the 2016 report, the complaints landscape has evolved as firms have taken positive steps forward. Regulatory standards are now viewed as the minimum when it comes to meeting customer expectations and ensuring the fair and equitable treatment of vulnerable customers has come a long way for the majority of firms. However, the research has revealed a widening perception gap between businesses and customers – 60% of firms believe that their customers are satisfied with the way their complaints are handled, while the reality is that only 22% of customers actually report being satisfied.

When asked 71% of customers said they are currently dissatisfied with the empathy of the staff member they interacted with and 70% are dissatisfied with the knowledge of the staff member they interacted with. This demonstrates a real need for firms to engage with customers on an emotional level, beyond regulatory minimums.

Resolution times also remain an issue, with 43% of firms believing they are resolving complaints at the first point of contact, yet only 20% of customers claiming that their complaint was resolved immediately.

Complaints Outlook 2019 also reveals a disconnect between the perceived importance of complaints handling by businesses and a lack of focus on building required professional skills. This is evident in the fact that, despite 62% admitting that their employees do not complete professional complaint handling training programmes or qualifications, 81% of the firms interviewed believe that their staff are appropriately equipped and empowered to deal with customers in vulnerable circumstances.

Furthermore, 50% of firms believe they are creating advocates in at least half of all cases, however only 38% of customers surveyed had a positive complaints experience and shared it with friends and family. This perception gap should be treated as a warning to financial services firms, with 84% of customers adding that they would change provider as a result of a poor complaints experience.

Paul Scott, Chief Commercial Officer at Huntswood, said: “Firms are increasingly recognising the value that can be derived from the complaints journey. However, despite this, our research shows that there are discrepancies between how financial services companies believe they are handling complaints and the actual reality for customers. Complaints are an unavoidable part of business, so it’s critical that they are handled well and that customers feel valued throughout.

“Firms should therefore be looking to create an effective complaints handling operation, underpinned by a robust strategy which focuses on providing the best possible outcomes for customers.

Doing so can deliver enormous benefits, such as deeper relationships with existing customers and an increase in new relationships from customer advocacy.“

Huntswood has extensive experience of working within the UK financial services sector, helping to improve suppliers’ complaints handling processes on a long- or short-term basis, or as part of an outsourcing arrangement.

This was posted in Bdaily's Members' News section by Huntswood .