1. THE RESPOND 2015 USER GROUP
Financial Services

2. TODAY’S AGENDA The Here and Now, Stuart O’Sullivan (Huntswood)
What’s on the Agenda in 2015, Stephen Humphreys (Huntswood)
Respond: The Road-Map and Future, Duane George and Eric Brown
Thematic Review – Getting Ready for Change (group discussion)
Respond User Group - Your Discussion Session
Respond Features and Functions, Eric Brown
Thematic Review – Getting Ready for Change, Initial Results
Post User Group Debrief and Refreshments

3. Complaint Handling – THE HERE AND NOW
APTEAN USER GROUP
Presentation by Stuart O’Sullivan
Thursday 5th March 2015

4. Design and implementation
Our propositions
Advisory
Services
Development centres
Complaint effectiveness
Training experts
Leadership skills
TCF
Design and implementation
Senior Manager’s Regime
Compliance monitoring
Investment / mortgage suitability
Financial promotions
Delivery specialists
Complaint handling
Past business review
Customer remediation
Quality assurance
Operational support
Managed
Client d
Business Improvement
Operational Risk
Compliance
Learning & Development
Recruitment
Paraplanning
New business checking
Sales and service
Culture
Training and competence
RDR/MMR
Root cause analysis
Skilled persons

5. AGENDA Summary of the complaint handling Thematic Review TR 14 / 18
Improving complaints handling Consultation Paper CP 14 / 30
Practical implications of CP 14 / 30

6. 1. SUMMARY OF THE COMPLAINT HANDLING THEMATIC REVIEW TR 14 / 18

7. The regulator’s view
“Firms have taken steps to improve their complaint handling – both as a result of previous regulatory work and as a result of firms’ own initiative… However, it is clear that firms could – and should – do more to deliver fair complaint handling and consistent outcomes for all consumers.”
TR 14/18

8. TR 14 / 18: The FCA’s Approach
This is the first thematic review where the FCA has actively collaborated with target firms.
AIM: to discover where common issues and barriers may exist that prevent effective complaint handling across the group, but also within individual firms.
Methodology: (i) review operating model(s) and management information
(ii) self assessment tasks including QA
(iii) analysis of results (firm and collective level)
(iv) working group created: discuss barriers, ideas for industry improvement
15 major retail firms who handle 90% of all complaints, across all retail sectors took part as well as 5 trade bodies
Activity structured around five key stages of firms’ complaint handling:
1. identifying a complaint 2. recording a complaint 3. internal reporting of a complaint
4. provision of redress 5. carrying out root cause analysis

9. TR 14 / 18: WORKING GROUP RECOMMENDATIONS
Dedicated complaint telephone lines should not use numbers that charge consumers more than a basic rate (including mobile users)
Reconsider the definition of a complaint (e.g. removing the more subjective element of ‘material’ distress or ‘material’ inconvenience)
Extend the time frame of the ‘next business day’ rule (e.g. extend to one week)
Remove the ‘non-reportable’ complaints element of the next business day rule so that firms would report all complaints received
Review the biannual complaints return to include more consumer centric measures
Revise the FCA complaints publication (e.g. including more consumer centric measures and contextualised data)

10. TR 14 / 18: ACTIONS FOR ALL FIRMS
The FCA stated in TR 14 / 18 that all firms may like to focus on:
Whether complaint handling policies and processes fully consider whether the interests of consumers are at their heart; avoid a tick-box approach to comply with the DISP rules
Reviewing internal definition of ‘complaint’ and training staff where the definition is not properly understood
Whether systems and processes could inhibit accurate recording of complaints, and further consider how this impacts ability to conduct root cause analysis (RCA)
The observations made about consistency of redress and distress and inconvenience payments
Considering their approach to RCA – focusing on the observations made in the thematic review paper
Whether they can make any improvements to their MI (messaging, interpretation, quality metrics and use of targets

11. 2. IMPROVING COMPLAINTS HANDLING – CONSULTATION PAPER CP 14 / 30

12. The regulator’s view
“Consumers are entitled to complain and to seek compensation from firms when things go wrong. We want to ensure that the process of complaining is straightforward, transparent and fair to consumers, while allowing firms to handle complaints as effectively as possible.”
CP 14/30

13. Improving complaints handling (Cp 14/30)
Summary of the proposals within CP 14 / 30:
Extend the time period for dealing with a complaint
Require firms to send a written communication
Ensure firms report and publish all complaints
Make general improvements to the ‘complaints return’
Limits to the cost of calls to financial services firms
Implementing the Alternative Dispute Resolution Directive
The following slides explore 1-3 further

14. Extend the time period for dealing with a complaint
The basic proposal here is to move the current next business day timeframes to the end of three business days
This should bring more customers into the informal process and should allow firms to deal with complaints more quickly and efficiently
The thematic identified a number of problems with trying to force customers quickly through the non reportable route
NBD cut off is currently an 'artificial escalator’ for complaints that could have been dealt with relatively quickly
Sometimes difficult for firms to contact customers to confirm they are content with the resolution

15. Require firms to send a written communication
This communication would be sent to all customers whose complaint is handled by the end of the proposed three business day period
Provides customer with referral rights to FOS if not content
Customers would be able to refer their complaint immediately after the firms response was received, rather than having to wait for 8 weeks to elapse
Will provide important clarity and awareness about their right to refer complaints to the FOS
Thematic review found that customers were not always informed or clear about this escalation route

16. ENSURE FIRMS report and publish all complaints
Remove the distinction between reportable and non-reportable complaints
Will increase transparency around complaints handling – and provide greater comparison
Becomes increasingly important if more complaints are handled within the three business day period
Some serious issues do not surface through the reportable complaints just because they can be dealt with currently by NBD
Reporting changes anticipated by March 2016

17. Working party recommendations vs cp proposals
Dedicated complaint telephone lines should not use numbers that charge consumers more than a ‘basic rate’ (including mobile users)
Taken forward in the new rules limiting the cost of calls to financial services firms
Reconsider the definition of a complaint (e.g. removing the more subjective element of ‘material’ distress or ‘material’ inconvenience
Not taken forward
Extend the time frame of the ‘next business day’ rule (e.g. extend to one week)
Taken forward in proposal to extend the time period for dealing with a complaint by three business days
Remove the ‘non-reportable’ complaints element of the next business day rule so that firms would report all complaints received
Taken forward in proposal for firms to report and publish all complaints
Review the biannual complaints return to include more consumer centric measures
Taken forward in proposal to make general improvements to the ‘complaints return’
Revise the FCA complaints publication (e.g. including more consumer centric measures and contextualised data)

18. 3. PRACTICAL IMPLICATIONS OF CP 14 / 30

19. PRACTICAL IMPLICATIONS OF CP 14 / 30
The deadline for responding to the CP is 13 March 2015.
FCA do take on board feedback and adapt if appropriate
Firms feeling strongly about any of the proposals should respond
The CP mentions that the reporting requirements are due to be implemented in March This is therefore likely to be the implementation timetable for other proposals as they are all interrelated. Do firms feel this is a realistic time frame?
Given the March 2016 implementation timeline, the Policy Statement is likely to be published following a relatively quick reflection period from CP responses

20. PRACTICAL IMPLICATIONS OF CP 14 / 30
Policy intent of the CP proposals appears sound – however, the devil is always in the implementation!
The CP does not propose any change to the definition of a complaint: specifically, “financial loss, material distress and material inconvenience” are to remain.
The proposal appears to be aimed at firms with high volumes of complaints – does this work well for firms with lower volumes?
The key change, i.e. lengthening NBD and requiring formal communication (and FOS rights) would seem to prompt a review of a firm’s target operating model where it seeks to accelerate ‘simple’ complaints

21. PRACTICAL IMPLICATIONS OF CP 14 / 30
Some questions:
Do firms have the right type of staff in the frontline to handle more complaints?
Are firms confident that front line staff could perform additional responsibilities / handle more complaints?
Will closing complaints with a ‘summary resolution letter’ encourage more customers to escalate their complaint to the FOS?
Will raising awareness about the Ombudsman Service drive up FOS referral rates?
Will firms records for complaints closed with a ‘summary resolution letter’ be able to support the decision made – i.e. do they currently capture enough info for NBD cases?

22. PRACTICAL IMPLICATIONS OF CP 14 / 30
Some questions:
The FCA is cost benefit analysis states that the cost of training for staff to implement the proposed changes is cost neutral – do firms think this will be the case?
Will the changes in reporting requirements require changes to how data is captured by complaint handlers, i.e. changes in complaint categories, changes in IT?
Do firms currently capture NBD complaints in the same way / system as reportables? What will the capture of all complaints mean for RCA going forward?
How will the increased reporting requirements impact existing operational reporting, MI packs and IT systems? Will this require greater resource? What will the impact be on governance oversight?

23. QUESTIONS
Presentation by Stuart O’Sullivan
Thursday 5th March 2015

24. Thank you
Presentation by Stuart O’Sullivan
Thursday 5th March 2015

25. Complaint Handling What’s on the agenda in 2015?
Presentation by Stephen Humphreys
5 March 2015

26. THE 2015 COMPLAINTS OUTLOOK
AGENDA
Discussion on the future direction and considerations for complaint handling in 2015.
THE 2015 COMPLAINTS OUTLOOK

27. Agenda
Governance, Management Information MI and ensuring effective oversight - Senior Managers Regime (SMR) & Complaints
Complaints, quality assurance and outcomes testing – how to demonstrate you’re delivering fair complaint outcomes
Vulnerable customers and complaints

28. 1. Governance, MI and ensuring effective oversight
SMR & Complaints

29. Senior managers regime

30. Scope and reach FCA Required Functions: - Customer service
Current Scope of APER/SUP10A
Proposed Scope of SMR
FCA Required Functions:
- Customer service
- Customer complaints handling
PRA Approved Persons
Executive Board (Plus wider Exco in large firms)
Chairman
Relevant committee chair
SMF
Heads of key business area
Individuals in Group Companies
Control or conduct focused functions
Significant Harm Functions
/ Material Risk takers (CRR)
Customer-facing roles that are subject to qualification requirements
Any other SIF roles under the current Approved Persons Regime
Individuals who supervise or manage another Certified Person
Conduct Rules CR
FCA Approved Persons
All other employees other than those ancillary staff who perform a role that is not specific
to the financial services business of the firm.

31. Governance, Culture and controls
Accountability
Structure
Roles and responsibilities
Oversight forums, e.g. Treating Customers Fairly (TCF), product design
MI & Business Reporting
GOVERNANCE
‘Tone at the top’
Learning and Development
(inc. Training)
Corporate vision and values
CULTURE
Incentives
Communications
Business file checking
Data capture e.g. MI & Key performance Indicators
CONTROLS
Training & Competency (T&C)
Mystery shopping
Customer outcomes testing
Product governance

32. Complaints MI “Don’t focus on what you can count…
...focus on what counts”

33. What is “good” complaints MI?
% of customers expressing dissatisfaction / FCA reporting
Position against appetite
% of complainants receiving fair outcomes / Financial Ombudsman Service (FOS) overturn rates
Oversight and challenge
Escalation
Focused management action
Unit time / double touch / FOS referrals / transaction failure rates
Operational effectiveness
Focus on productivity and quality
Operational management

34. What is “good” complaints MI?

35. 2. Complaints, quality assurance and outcomes testing
How to demonstrate you’re delivering fair complaint outcomes

36. The aim of Quality Assurance (QA)
Identifies “unfair outcomes”
Demonstrate consistent outcomes
Assurance regarding the training & competence model
Key feed of MI into senior management

37. Making QA Outcomes focused
Firms should undertake risk-based outcomes testing to assess the quality of customer outcomes at each stage of the ‘customer journey’
WHY?
Provide assurance that complaints are handled fairly and consistently, delivering fair outcomes for customers – truly assess the ‘quality of complaint handling’
HOW?
risk weighted
QA activity should consider:
Was the outcome fair for the customer?
Unfair outcomes – what retrospective / remedial action must you take?
Any conduct breaches (SMR firms)
Consider the underlying root cause and take corrective action

38. An example end-to-end customer journey
Identification
Investigation
Decision
Communication
For each stage of the customer journey, we have a defined a ‘generic’ set of customer outcomes. These outcomes represent the key stages of a typical complaints lifecycle
They are aligned to the firm’s conduct risk strategy
The purpose of outcomes testing is to determine whether the firm has achieved a fair customer outcome at each stage of the customer journey 38

39. 3. Vulnerable customers and complaints

40. Martin wheatley – FCA Chief Executive
consumer vulnerability has become a key test of conscience for the City
Martin wheatley – FCA Chief Executive

41. Martin wheatley – FCA Chief Executive
Many firms will, for example, have highly specialised teams to deal with issues related to consumer vulnerability. Yet if frontline staff do not have the expertise, or confidence, to handle those cases effectively, the consumer experience is still likely to be a frustrating one
Martin wheatley – FCA Chief Executive

42. The scale of vulnerability in the UK
Extracts from FCA Occasional paper 8

43. Occasional Paper 8 – Impact on complaints
Vulnerability is not an in or an out – it’s a scale
Vulnerable customers are, by definition, less likely to complain
Frontline staff, who represent the point of access for customer, is where investment is required
Objection handling at point of complaint – vulnerable customers are much more likely to be closed down or experience objection handling
Vulnerable customers are more likely to make poor choices (both at point of sale and complaint)
When engaging with vulnerable customers, don’t just think of regulation, what about the law?

44. Occasional Paper 8 – Impact on complaints
Information asymmetry – increased for vulnerable customers
historical approach
disclosure (not sufficient for vulnerable customers)
tick box / signature – side steps issue
FCA now opening the debate about how behavioural economics applies to vulnerable customers
Some personal examples:
car Finance - fees complaint
major Bank - package bank account complaint
life insurer – critical illness waiver of premium complaint
general banking complaint – customer perception “blacklisting”

45. Questions for firms to consider
Do we want to identify where customers have specific needs that aren’t addressed through our standard process? How do you consider and apply the differences between vulnerable and particularly vulnerable customers? Do your customers have a specific need, or are they generally at risk of vulnerability? What adjustments are reasonable to make for vulnerable customers? How empowered are complaint handlers? How do you take ‘emotion’ out of the decision, but still be empathetic and deliver fair customer outcomes? How are your telephone based staff trained to understand the points that customers are making? How do you give space for the customer to reflect? Do your front line staff currently view vulnerable customers as opportunities for next business day complaints?

46. Questions
Presentation by Stephen Humphreys
5 March 2015

47. Thank you
Presentation by Stephen Humphreys
5 March 2015

48. Respond’S ROADMAP & THE FUTURE
Please contact your Account Manager if you would like to discuss Road-Map content. These slides cannot be included in a public release.

49. Director, Respond Product Line
Questions
Duane George
Director, Respond Product Line
Contact me with any questions about this presentation and the future of Respond

50. Respond demonstration
Please contact your Account Manager of you like to see a demonstration of Respond features. This can be offered virtually if you prefer, or on site.

51. NEXT: THE FCA Thematic REVIEW
Defining a complaint
Recording ALL complaints and the 3 day rule
Reporting changes (internally and to the FCA)
Written responses (new 3 day rule)
March 2016 … Change Management, are the people around you ready too?

52. COMPLAINTS HANDING THEMATIC REVIEW & CONSULTATION PAPER
12:00-12:45

53. ROUND TABLE DISCUSSIONS
Each table has an Aptean Facilitator to lead and take notes
There are 5 key topics (following this slide)
For each topic you have 5 minutes to share your thoughts
Then 2 minutes to establish the points
There will be a chime between slides as they auto-progress forward
After the 5 topics there will be closed questions for polling
At the end of today’s sessions we will present the initial results
Aptean will author a more in depth set of results post-event
CHATHAM HOUSE RULE APPLIES

54. 1/5 – GROUP DISCUSSION (INTRO)
DEFINING A COMPLAINT
“Any expression of dissatisfaction” is not the FCA’s definition. The FCA turned down a request to change the definition to this.
FCA: “The complaint must allege that the complainant has suffered (or may suffer) financial loss, material distress or material inconvenience.”

55. 1/5 – GROUP DISCUSSION (5 MINS)
DEFINING A COMPLAINT
“Any expression of dissatisfaction” is not the FCA’s definition. The FCA turned down a request to change the definition to this.
FCA: “The complaint must allege that the complainant has suffered (or may suffer) financial loss, material distress or material inconvenience.”

56. 1/5 – WRAP UP (2 MINS)
DEFINING A COMPLAINT

57. 2/5 – GROUP DISCUSSION (INTRO)
RECORDING ALL COMPLAINTS
AND THE 3 DAY RULE
The FCA proposes giving firms 72 hours instead of 24 hours to handle a complaint informally … but as a result every complaint becomes reportable.

58. 2/5 – GROUP DISCUSSION (5 MINS)
RECORDING ALL COMPLAINTS
AND THE 3 DAY RULE
The FCA proposes giving firms 72 hours instead of 24 hours to handle a complaint informally … but as a result every complaint becomes reportable.

59. RECORDING ALL COMPLAINTS
2/5 – WRAP UP (2 MINS)
RECORDING ALL COMPLAINTS
AND THE 3 DAY RULE

60. 3/5 – GROUP DISCUSSION (INTRO)
REPORTING CHANGES INTERNALLY AND TO THE FCA
The FCA plans to benchmark sales vs complaints and to publish 3 day complaints data too.
Internally what also needs to be done differently to fully consider these 3 day complaints?

61. 3/5 – GROUP DISCUSSION (5 MINS)
REPORTING CHANGES INTERNALLY AND TO THE FCA
The FCA plans to benchmark sales vs complaints and to publish 3 day complaints data too.
Internally what also needs to be done differently to fully consider these 3 day complaints?

62. REPORTING CHANGES INTERNALLY AND TO THE FCA
3/5 – WRAP UP (2 MINS)
REPORTING CHANGES INTERNALLY AND TO THE FCA

63. 4/5 – GROUP DISCUSSION (INTRO)
WRITTEN RESPONSES
UNDER THE 3 DAY RULE
Letter – – Text
3 day complaints will require a reply using stock text from the FCA (via any of the above) giving brief case outcomes, an acknowledgement and FOS referral rights.

64. 4/5 – GROUP DISCUSSION (5 MINS)
WRITTEN RESPONSES
UNDER THE 3 DAY RULE
Letter – – Text
3 day complaints will require a reply using stock text from the FCA (via any of the above) giving brief case outcomes, an acknowledgement and FOS referral rights.

65. WRITTEN RESPONSES UNDER THE 3 DAY RULE
4/5 – WRAP UP (2 MINS)
WRITTEN RESPONSES
UNDER THE 3 DAY RULE

66. 5/5 – GROUP DISCUSSION (INTRO)
MARCH 2016 … 1 YEAR FROM NOW
Change Management Plan – Are you gearing up for this? Do you have headcount in the right places? Can the frontline handle 3 day rules (including written replies)? Is Corporate ready for a 2-3x increase in published complaints data? Have you replied to the FCA’s Consultation Paper?

67. 5/5 – GROUP DISCUSSION (INTRO)
March 2015
Today
March 2016
Go-Live

68. 5/5 – GROUP DISCUSSION (INTRO)
March 2015
Procurement
System Changes
Culture Change
Training
March 2016

69. 5/5 – GROUP DISCUSSION (5 MINS)
MARCH 2016 … 1 YEAR FROM NOW
Change Management Plan – Are you gearing up for this? Do you have headcount in the right places? Can the frontline handle 3 day rules (including written replies)? Is Corporate ready for a 2-3x increase in published complaints data? Have you replied to the FCA’s Consultation Paper?

70. 5/5 – WRAP UP (2 MINS)
MARCH 2016 … 1 YEAR FROM NOW

71. RESPOND USER GROUP SESSION
13:45-15:15

72. Respond CASE AND ADVANCED AGENT
Eric Brown, Solutions Consultant

73. Impact of 3 day informal process
AHT?
1 & Done
Coach?
Escalation

74. Summary Communication
For First Point of Contact
Capture process
Simulated Lookup
Creating the communication
Resolving an escalation
output

75. Summary communication
Advanced Case Agent
Configurable capabilities
Supports varied working practices
Reduces operational expenditure

76. Contact me with any questions about Respond’s features and functions
Eric Brown
Solutions Consultant
Contact me with any questions about Respond’s features and functions

77. RESULTS FROM GROUP WORK
15:45

78. Over report vs risk of under reporting
DEFINING A COMPLAINT
Over report vs risk of under reporting
Consistency of Capture and management of complaint
Training of Front Line Staff and others

79. RECORDING ALL COMPLAINTS AND THE 3 DAY RULE
“Just Like Starting Again”
Clarification from FOS re ability to
review summary resolution
Need to capture more information at
Front line – poorer customer service?

80. REPORTING CHANGES INTERNALLY AND TO THE FCA
Getting Stakeholder buy in
Case numbers increasing – perhaps
over 500 cases
Publication of cases – not all
companies are the same

81. WRITTEN RESPONSES UNDER THE 3 DAY RULE
Will use channel of customer
complaint to reply
Cost burden of responding via letter
Clarification on level of
personalisation required

82. Cost burden – double staff levels to manage Are FOS ready?
MARCH 2016 … 1 YEAR FROM NOW
NOT STARTED YET!
Cost burden – double staff levels to
manage
Are FOS ready?