The financial services industry is continuously evolving, and it is essential to optimize collections strategies to maintain liquidity and minimize risk. One of the most critical choices for credit un...
Regulations & Compliance
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3 min read
We live in a day and age where consumers are all too happy to verbalize their complaints. Whether via Amazon reviews, Yelp, or social media posts, consumers have the ability to give their virtual thumbs up or down to let the world know how they feel about a product, service, or business.
For financial institutions, it’s particularly important to address consumer complaints. One of the most effective ways to do this is by implementing a comprehensive complaint management program. A complaint management process empowers financial institutions in the following ways:
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Helps you to prevent member loss
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Allows you to self-identify and take corrective action
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Identifies opportunities for improvement
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Gives you the opportunity to address any regulatory violations that come to light
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Can help you proactively prevent litigation by resolving complaints immediately
To help you achieve this, your complaint management procedure should have seven key components:
1. Policies and Procedures
All complaints should be handled and governed by clearly written policies and procedures, ensuring your institution provides a consistent, compliant, and non-discriminatory avenue for conflict resolution.
2. Clear Channels of Communication
Your customers need an easily accessible channel to write reviews or submit complaints. It could be helpful to set up dedicated email addresses, website forms, or telephone extensions to receive customer feedback and resolve issues.
3. Investigation Process
If one of your customers should lodge a complaint through any of your defined channels, it’s critical that you have a clearly defined system for addressing the complaint. The process for resolving complaints should include:
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A recorded interview or written email in which the customer describes the problem
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An interview with the appropriate staff members involved
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Checking the complaint against current best practices, policies, and procedures, and all relevant laws and regulations.
4. Written Response
Once your institution has thoroughly investigated the complaint, you should resolve the issue in writing and follow appropriate regulatory response standards to ensure that the details of your resolution process are being properly recorded. This also allows your institution to provide a clear and precise explanation of your actions for the customer who made the complaint and to record the date and manner of resolution.
5. Corrective Action
If any of the customer complaints indicates that illegal, discriminatory, deceptive, unfair, or improper practices have in fact taken place, your institution must take decisive corrective action to change the behavior. In some cases, this could require modifications to your current policies and procedures, employee training and monitoring, systems updates, or rewriting printed and web-based material.
6. Retaining and Analyzing Data
Your financial institution should have and follow a system for properly logging consumer complaints. Once it has been compiled, this data is a great source of insight that will allow you to recognize consumer trends, identify areas of risk, spot compliance violations, and diagnose any current weaknesses in your customers’ experience with your institution.
7. Employee Education
When considering your financial institution’s complaint management program, employee education should be a critical component. Employees must know how to manage and log consumer complaints. Institute appropriate training on these policies for any staff members who resolve complaints or may have the opportunity to receive a complaint from a customer.
Complaints are inevitable. A proper complaint management program that addresses customer complaints in a timely, respectful, and proactive manner will help preserve your institution’s reputation, ensure high standards of compliance, provide data for identifying systemic product or process issues, and result in greater member satisfaction.
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A version of this blog post was originally published on creditunions.com. Click here to read the original article.
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