UK - Financial services companies, such as insurance and pensions providers, which sell primarily through intermediaries have been identified as the worst performers when it comes to customer services and complaint handling, according to a recent survey of 50 financial services companies by IBM and Swallow Information Systems, a provider of consumer-to-business customer management software.
Professor Merlin Stone, IBM professor of relationship marketing at Bristol Business School, who led the survey, said: The Financial Services industry rates poorly on customer complaints handling compared with almost all other industries, especially retailers and travel companies. Companies are also far behind in understanding the implications of data protection on their business.
Those companies which have traditionally sold through intermediaries have, until now, paid less attention to relationships with their customers and the process of complaint handling because they have not had direct contact with their end users. Direct insurers, credit card companies and simple banks have all performed better because they are more customer-focused.
But, the new FSA regulations impact upon all financial services companies and there will be a process of monitoring and auditing to make sure all companies, big or small, become compliant and install better systems for managing customer complaints.
According to the survey, 92% of companies know they have to improve in line with the FSA's new regulations, contained in the Financial Services and Market Act (FSMA) 2000, which requires all companies to have in place an appropriate written complaints procedure including:
* publishing complaints procedures and making them easily available to consumers* investigating complaints promptly, within appropriate timescales* offering appropriate levels of redress where complaints are upheld* keeping records of complaints and reporting aggregate data to the FSA* co-operating with the Financial Ombudsman Service in its investigation of complaints.
The survey also revealed that 73% of financial services companies use a decentralised approach to customer service and lacked the necessary technological infrastructure to manage customer complaints across the entire company. Processes for customer feedback were also seriously undeveloped and there is a lack of integration between customer feedback and product development.
Dave Cox, MD of Swallow, said: The prevailing customer relationship management technology in financial services is a mishmash of databases and spreadsheets distributed across different departments which don't usually communicate.
Only 53% of companies surveyed had systems capable of implementing functions required for FSA compliance. Only one company out of the 50 surveyed was compliant but 92% acknowledged that major changes were needed to improve their customer service and complaint handling procedures.
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