Latest report from the FCA shows customer complaints down 10% over 6 months – to new historical lows.
New complaints data from the Financial Conduct Authority (FCA) provides a positive update for the second half of 2021. There were 1.84 million total complaints recorded by financial services firms over that period – down 10% from 2.04 million in the previous 6 months. Moreover, this total number is the lowest half-yearly ever recorded since H2 2016 – the earliest period currently covered on the FCA’s website.
A large part of the positive change over recent years has been due to a dramatic fall in PPI complaints received – down from almost 3.9 million in H2 2019 to just 16,378 in H2 2021. As we noted in our previous analysis, for H1 2021, the industry has delivered an impressive performance in addressing the PPI scandal, which dates back to the 1990s.
But even without the PPI numbers, complaints fell by 8% in H2 2021 from the previous half year, reinforcing the generally positive picture. And this encouraging trend is evident across most areas of the industry in the latest report. 41 of the 49 product categories in the report recorded lower complaints in H2 compared with H1 2021.
Amongst the few categories moving in the opposite direction, there was a significant increase in warranty insurance, with complaints up 18% in the half year to 52,091. Warranty insurance complaints also rose by 25% in H1 2021 (from H2 2020).
This ongoing trend is probably linked to the increasing amount of consumer spending on household appliances and home improvements that was seen over the course of the pandemic – as spending in other areas, including holidays and travel, was curtailed.
In fact, travel insurance complaints fell again in H2 2021, although by a lower percentage (5%) than the dramatic drop of 63% recorded for H1 2021, compared with H2 2020. It will be interesting to see whether this falling trend for travel insurance complaints comes to a decisive end during the current H1 2022 period – in the light of the recent disruption seen amongst UK air travel operators.
The most complained about product in the report remains current accounts. However, this is obviously largely because there are more current accounts in operation than any other product category. Nonetheless, with 526,609 complaints in the half year, current accounts was still one of the few categories recording an increase – up 5% on H1 2021. In fact, current accounts accounted for 28.5% of total complaints for the half year period, followed by motor & transport insurance (11.8%), “other general insurance” (11.7%) and credit cards (10.5%).
“It’s good to see the overall number of complaints falling to new lows, “ comments Matthew Westaway, co-founder and CEO of Voyc. “As always, the big banking products, especially current accounts and credit cards, account for a high percentage of total complaints,” he adds, “ but there are some interesting trends in some smaller product categories, which can often be significant for the overall financial well-being of the customers who hold them.”
Steve Devine, Founder of The Protect Association agrees: “For example, there’s been a steady increase over recent years in the number of complaints related to equity release.
“Obviously, choosing an unsuitable equity release product can be far more serious for an individual than opting for the wrong current account. What’s more, these products are far more likely to be sold to customers who are vulnerable. It will be important to follow the complaints curve for products like equity release as the size of the elderly population increases.”
Nick McDonald, a co-founder of The Compliance Guys also welcomes the latest fall in the number of total complaints but adds: “With initiatives such as its new Consumer Duty, the FCA is rightly focused on the protection and financial well-being of consumers. This increases the need for professionalism and outstanding customer service across the industry, to ensure that the trend in complaints continues to head in the right direction”.
Voyc works with financial services firms to apply speech analytics AI software to identify compliance issues and customer complaints in contact centres – and escalate them to be resolved without delay. This can dramatically improve customer experience and significantly reduce the number of cases that develop into expensive formal complaints.
In addition, Voyc helps financial services firms to identify vulnerable customers, monitor and manage the performance of contact centre agents and create new operational capacity to drive better customer outcomes.
For further information, contact us here.
