New standard forces banks to deal with customer complaints

Many of us have had to deal with dissatisfaction relating to a financial product or service provided by a bank. 

According to Business Tech, almost half of all social media posts requiring banks’ attention and action went unanswered in 2020. 

The publication reports that research from BrandsEye shows that local banks are currently not meeting the six Treating Customers Fairly (TCF) rules . FSCA describes TCF as: “an outcomes based regulatory and supervisory approach designed to ensure that regulated financial institutions deliver specific, clearly set out fairness outcomes for financial customers.”  

The six Treating Customer Fairly outcomes are: 

- Customers can be confident they are dealing with firms where TCF is central to the corporate culture.

- Products & services marketed and sold in the retail market are designed to meet the needs of identified customer groups and are targeted accordingly.

- Customers are provided with clear information and kept appropriately informed before, during and after point of sale.

- Where advice is given, it is suitable and takes account of customer circumstance.

- Products perform as firms have led customers to expect, and service is of an acceptable standard and as they have been led to expect.

- Customers do not face unreasonable post-sale barriers imposed by firms to change product, switch providers, submit a claim or make a complaint. outcomes based on social media conversations.

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BrandsEye chief executive Nic Ray says the company discovered that 90.7% of negative social feedback included TCF themes. He added that almost half of all social media posts requiring banks’ attention and action went unanswered in 2020. 

This might soon change as the banks in South Africa have less than a month to ensure compliance with a new conduct standard, or risk facing hefty fines, reports Business Tech. Regulating customer complaints will come into force on 3 July 2021.

“In terms of Section 8, all banks must establish, maintain and operate a complaints management framework, which provides for appropriate complaint record-keeping, monitoring and analysis.Banks will then need to report to their governing bodies and relevant committees outlining identified risks, trends and remedial action taken,” Business Tech quoted Jessica Blumenthal, an executive at law firm ENSafrica. 

Ray says banks will be obligated to monitor and report on complaints.

“Banks are obligated to monitor and report on all complaints falling in that definition, regardless of the medium through which they are raised. This includes social media. This highlights a critical need for banks to drastically improve their social media customer service and complaint management efforts. Failing to swiftly identify and respond to service requests online, exposes banks not only to regulatory risk, but also the reputational risks that such sanctions would generate,” Ray said.

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“This highlights a critical need for banks to drastically improve their social media customer service and complaint management efforts. Failing to swiftly identify and respond to service requests online, exposes banks not only to regulatory risk, but also the reputational risks that such sanctions would generate,” Ray added. 

Image courtesy of iStock/ @CagdasAygun