UK customers are changing banks due to poor complaints handling processes

Research by global software firm Nuix has found that UK customers are leaving their banks due to complaint mishandlings during the pandemic.

The 2021 Global Regulator Report examined 31 financial services and competition regulators across 18 countries and discovered that 42% of regulators had begun investigations after receiving customer complaints or tip-offs. In tandem, the study surveyed over 1,500 customers to examine the complaints process.

From the study, it was found that banks were failing to address complaints well enough, and this was leading to customers departing. Up to 25% of UK banking customers who had complained such they would not use the same bank in future as a result of its handling of the complaint.

Over a quarter – 27% – of customers had complained to their bank, their ombudsman, or both, which increased the chance of investigations and the potential for financial fines.

Up to 66% of banking customers surveyed were found to have complained within the last year, with 32% of those who had complained stating that their problem had not been resolved.

Of all the different kinds of complaints, bank fraud was the most common form at 30%, while email, telephone and mobile text messaging scams the next most common at 18%, 17% and 14% respectively.

Bank accounts, debit cards and credit cards were the most complained about product of service by up to 61% of banking customers. Meanwhile, 61% of banking customers said they were targeted with emails scams during the pandemic and 69% said they were feeling more concerned about financial fraud after the pandemic.

Over a third – 39% – of customers highlighted that they didn’t have a positive experience of their bank’s complaints process, and 21% said bank fraud was the main reason for their complaint.

Nuix head of corporate Andy Edler said, “Our research finds that UK banking customers are more concerned about financial fraud since the COVID-19 pandemic began, with 6 in 10 people targeted by financially relevant email scams. This type of cyber fraud has become a rising issue for businesses as well as consumers, especially with the move to remote working and the acceleration of digital transformation.

Business email compromise is a specialist type of phishing attack that remains one of the most common and effective cyber tactics for fraudsters. The simple method only requires one slip up to inflict devastating effects on both companies and individuals by gaining access to files or even demanding the transfer of funds.

“With banking customers saying that bank fraud was a key reason for their complaint, banks need improved data analysis and insight to truly understand the root cause of complaints and to identify patterns and behaviours as they emerge. This will help determine the right customer treatment strategies, improve confidence and deliver a better customer experience. In addition, it will identify operational deficiencies, optimise channel effectiveness, and help reduce cost.

“The impact of these systemic failings makes it imperative that organisations improve their processes, data analysis, and core systems to mitigate these issues and to maintain regulatory compliance. Failure to do this adequately not only impacts customer experience and reputation but exposes a greater enterprise risk. In today’s digital age, it’s not only essential for banks to improve technology to prevent fraud from occurring, but they must utilise the data at their disposal to address the customer feedback loop effectively and use this information to transform and future proof their business.”

Copyright © 2021 FinTech Global

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