Big problems at South African banks written by Bianke Neethling

[Nat Quinn]

A recent study showed that most of South Africa’s banks fail to meet all the requirements related to complaints management.

Several banks were found to have inadequate record-keeping, a lack of communication and failure to acknowledge complaints properly.

These findings come from the Financial Sector Conduct Authority (FSCA), which conducted a desktop review to assess the ability of banks to consistently deliver on fair customer outcomes.

Part of the FSCA’s mandate in South Africa is to protect financial customers by promoting fair treatment by financial institutions, including banks.

This includes consistently delivering on fair customer outcomes as it relates to complaints handling.

Therefore, the FSCA assessed the extent to which banks adhered to the relevant principles in the Conduct Standard for Banks in their dealings with customer complaints.

The regulator conducted this review between 18 July 2022 and 17 November 2022 but only released its findings in March 2025.

The FSCA assessed 23 banks for regulatory compliance and assigned a satisfactory or unsatisfactory rating to them.

“By pointing out satisfactory and unsatisfactory processes, the desktop review afforded banks the opportunity to rectify poor complaints management processes,” the regulator explained.

“The initial stages of the review revealed that the majority of banks exhibited unsatisfactory complaints management processes across the assessed requirements.”

“Considering this observation, the FSCA informed banks about the imperative to align their processes with the principles outlined in section 8 of the Conduct Standard.”

The regulator said these banks were encouraged to take remedial action as soon as possible.

Concerningly, the FSCA’s review found that not only do many banks not adhere to all of the requirements that accompany fair and efficient complaints procedures, but that most did not meet these requirements.

For example, the FSCA found that 60% of banks failed to meet the requirement that complaints be classified accurately according to specified minimum categories.

The FSCA explained that many banks still categorised complaints under older frameworks rather than aligning with the updated Conduct Standard.

Evaluation of banks’ compliance

The evaluation of banks’ compliance with the requirements of recording complaints-related information revealed an even more substantial deficiency in adherence.

The FSCA reported that 85% of banks were assigned an unsatisfactory rating with respect to the accurate, efficient, and secure recording of complaints-related information.

This includes the obligation to maintain comprehensive records for each reportable complaint received from retail complainants.

In addition, 70% of banks did not satisfy the requirement that stipulates that a bank must maintain data in relation to reportable complaints that are received and categorised.

“The general lack of oversight of overall complaints’ statistics is concerning and a possible impediment to the effective management of complaints by banks,” the regulator said.

The FSCA’s review further highlighted that 92% of banks failed to keep complainants adequately informed of the progress of their complaints, which is also a requirement outlined in the Conduct Standard.

“All banks fell short of ensuring that complaints handling processes cater for effective communication strategies to ensure that complainants are kept informed of the process being followed and the outcome of their complaint,” the regulator said.

In addition, these banks also failed to ensure the availability and contact details of the relevant ombud services during all relevant stages of the customer relationship.

Concerningly, the desktop review found that 92% of the banks did not comply with the requirement that they provide clear and adequate reasons for the rejection of a complaint.

This requirement includes sharing details of any applicable escalation or review processes, including how to use them and the applicable timelines, which these banks failed to do.

“The results of the desktop review indicate areas of non-compliance and serve to guide banks in taking the necessary steps to comply with requirements outlined in section 8 of the Conduct Standard, and also to improve the overall customer experience,” the FSCA said.

 

source:Big problems at South African banks – Daily Investor

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