Q&A: Davies on the need for support in complaints handling

1. How has the implementation of Consumer Duty impacted the complaints function?

The new Consumer Duty has led to a more rigorous customer-focused approach to complaints handling, with firms having to ensure all customers are not only receiving good outcomes, but satisfactory and timely resolutions to complaints.

Since Consumer Duty has come in we have seen increased accountability and proactivity from firms and their executive teams – insurers and brokers are proactively identifying and addressing potential sources of complaints and doing root cause analysis to reduce the risk of complaints materialising.

There is also an increase in the demands on data and internal reporting to provide oversight of what’s happening in complaints, leading to a cultural shift from the top down.

2. What are firms doing to ensure that they are providing better outcomes in the complaints journey?

There is a reliance on enhanced training and development to help teams provide better customer outcomes and identify complaints in the first instance.

This is particularly true for when it comes to identifying and supporting customers in vulnerable circumstances, which the Consumer Duty places an emphasis on.

We’re also seeing improved communications whereby firms are ensuring customers are receiving updates at every step of the process, even if it’s an update to say “there’s currently no update, but we’re working on it”. 

And of course, we’re seeing firms lean on data, AI and automation to help streamline the process – making it more efficient for both customer and agent.

3. What can the industry do as a whole to ensure a better service for customers and reduce the risk of complaints?

The need for constant evolution, improvement, and adaptation is crucial, so collaboration and knowledge-sharing is key – this is crucial for gaining an industry-wide view, rather than maintaining an insular one.

Similarly, utilising data and insights available within the public domain such as FCA complaints reporting will enhance customer service when used to guide decisions.

It’s also important to keep abreast of technology and advancements and leverage this where applicable and where possible, but to also review and refine customer processes regularly based on those technological advancements and industry trends.

4. What role does AI and automation play in the complaints journey?

Firms are using AI and automation for a multitude of things, with one of the main areas being for triage and routing – to identify vulnerability or distress, or automated categorisation, assessment and escalation.

Companies are also using these tools for auto-summary to help them extract topics, themes and sentiments that’ll enhance their complaints process while also utilising intelligent document processing to help summarise customer calls to make the process more efficient.

AI and automation can also be used for increased personalisation – lending firms recommended actions for a specific complaint – and as an agent co-pilot for automated documentation which, with the oversight of a human agent, can write final response letters, think smartly about next best steps, give guided recommendations and retrieve relevant information.

5. What does the regulatory environment have in store over the next 12 months for complaints teams?

It’s going to become increasingly more stringent and customer-focused, with a large focus on whether Consumer Duty has been properly embedded.

There are also other upcoming regulatory requirements to consider. For example, the FCA’s operational resilience requirements, which are leading complaints teams to think about how they can enhance their operational resilience, even during disruptions and surge periods.

Alongside this, given some of the remediation activity we’ve seen in the industry recently, firms may want to understand what risk they are carrying in their own books and ensure that operational teams are set up to deal with any customer queries or complaints that arise from their own remediation activity.