- This topic is empty.
Viewing 1 post (of 1 total)
-
Posts
-
While only 8% financial institution customers surveyed lodged complaints in 2022, roughly two-thirds of them were unsatisfied with how their complaint was resolved.
This is according to the Financial Service Conduct Authority’s (FSCA) Complaints Management Industry Review Report, which surveyed 1,178 financial institutions in 2022 and 11,602 financial customers in 2023.
It should be noted that the FSCA targeted 3,241 financial institutions for the survey.
These institutions comprised category 1 financial service providers (FSPs), retirement funds, and retirement fund administrators.
Category 1 FSPs exclude banks and are described as those that give advice or provide an intermediary service assisting clients in entering into a transaction. They include certain short-term and long-term insurers and financial advisors.
The report found that 75% of Category 1 FSPs did not receive complaints between the survey period of March to December 2022, with only 4% of firms receiving over 100 complaints.
Similarly, only 2% of retirement funds received over 100 complaints throughout the period, with 53% not receiving any.
Retirement fund administrators received the highest rate of complaints, with only 30% not receiving any and 21% receiving over 100.
The report found that most complaints were resolved within a month across the industry, with category 1 FSPs able to resolve 88% of complaints within this period, retirement funds 95%, and retirement fund administrators 81%.
The most common reason for delays in feedback from financial organisations was delays from an external third party, according to the institutions.
On the other hand, 43% of consumers who had lodged complaints said their complaints were still ongoing, and only 31% had them resolved within a month.
Of the 11,602 financial consumers surveyed, only 655 said they had lodged a complaint with an FSP between 2021 and 2023.
However, the FSCA said only 34% of the respondents who submitted a complaint were aware of financial institutions’ internal complaints handling processes.
In fact, awareness of external bodies (47%), such as ombuds, was more common amongst the population group than internal dispute resolution processes at the concerned financial institution.
The report found that 55% of those who complained disagreed that “it was easy to find information on how to do so.”
Of the 655 complaints submitted, most were directed to category 1 FSPs and retirement funds — 31% each — with 30% not lodging complaints to any of the surveyed financial institutions.
Overall satisfaction levels were low, as indicated in the chart above, with 48% of complainants being very dissatisfied with the process, 19% somewhat satisfied, and 33% either somewhat or very satisfied.
Very few complaints were said to have been resolved at the first level of contact (23%), 51% were not, and 26% of respondents did not know. 67% of financial institutions had more than one level of complaint escalation.
The FSCA said that, given the low complaint rate of 8%, there are gaps within the financial institutions’ complaints handling processes.
It believes this is also due to low awareness.
“Financial institutions should provide clear and understandable information about complaints handling and escalation processes, including available channels and straightforward procedural navigation,” the FSCA said in its findings.
The regulator identified benefit statements, policy documents, call centres, and online platforms as an effective way of raising awareness.
Consumers also suggested several ways to improve the complaints handling process, including improving overall customer handling, keeping complainants informed, handling complaints promptly, and conducting thorough investigations.
“Consumers’ experiences with internal complaints handling are largely negative, as shown by high consumer dissatisfaction scores,” the watchdog said.
“Financial consumers’ frustrations and pain points include delays in complaint resolution and lack of regular updates or explanations regarding the status of their complaints.”
SOURCE:Financial institutions under fire for consumer complaints in South Africa – MyBroadband
Viewing 1 post (of 1 total)
- You must be logged in to reply to this topic.