Regulation Breakout: Supporting regulators, networks, and financial institutions to respond to client complaints



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SPTF Annual Meeting 2015: Day two notes

Regulation Breakout: Supporting regulators, networks, and financial institutions to respond to client complaints.

This panel examined new insights into client behaviour related to using complaints mechanisms and how regulators, networks, and financial institutions can encourage clients’ rights. Panellists shared lessons learned in complaints mechanism design and how partnerships among industry stakeholders can lead to better results for clients.


Speakers: Alex Fiorillo, GRID Impact; Hema Bansal, Smart Campaign; Aldo Moauro, MicroFinanza Rating
What are the barriers that discourage clients from voicing complaints about their experiences with financial institutions/products?
Alex Fiorillo mentioned that CGAP did research on client behavior to understand how they behave after they have a negative experience with the organization. Some of the key findings from the study were:

  • Many clients accept a negative experience with the FSP/product because they see it as part of doing business (clients would expect unexpected fees, charges, mal-treatment)

  • Even though complaint mechanisms might be in place, many clients do not use them because they do not think that anything would change

  • When customers did go to the FSP to express a complaint, many times they were told that they were” asking too many questions” or “the manager is busy, come back tomorrow” to delay or create hassle factors to customers. So even when customers tried to report a complaint they found that the institution was not receptive.


What barriers prevent financial service providers (FSPs) from creating and using effective complaint mechanisms?
Highlights from results of +20 certifications conducted by Microfinanza Rating:

  • Out of 26, only 5 institutions were compliant with having mechanisms

  • Only 30% of institutions had training in place for staff to handle complaints

  • But +61% of institutions used the feedback obtained to improve practices and products

  • Only 22% effectively monitor the effectiveness of client complaint mechanisms

  • But 70% of institutions has dedicated staff (particularly in central office) to deal with client complaints

According to Aldo Moauro (Microfinanza Rating) the main barriers that prevent FSPs to create, put in place, and use effective client complaint mechanisms are:



  • Cost

  • Confusion between different kinds of mechanisms (complaint vs. client satisfaction surveys) – when FSPs want feedback from clients they typically rely on client satisfaction surveys

According to Hema Bansal (Smart Campaign) the main barriers are:



  • Institutions do not prioritize understanding clients

  • Selection of complaint channel – Some institutions think that a complaint box is enough. However, complaint boxes tend to not be effective

  • There is no process to capture complaints at the field level – which means a lot of complaints are not documented and get lost. Very few organizations have a mechanism to capture complaints at the field level

  • Client communication – clients need to understand the channels available to capture their opinion. Otherwise, they will not be effective.


What is the role of networks?
While the work is still evolving there is still no clear mandate for networks or clear examples of networks with strong client complaint mechanisms. Smart Campaign and SEEP have worked with some networks to help them understand the need for both networks and their members to set up a client complaint mechanism.
What is the role of regulators?
Networks could share with regulators the most important/common client complaints for regulators to better understand the state of the market. The main barrier for regulators to get involved has been lack of capacity (from regulators) to dedicate to this matter. So even though regulators have expressed desire to help, they have also mentioned lack of capacity. Many have suggested third parties taking this role. In Ghana, for example, the regulators are empowering third party actors to handle low-level complaints.
How can we empower customers to seek resolution?
Clients are more likely to use client complaint mechanisms if they have a close example (friend, neighbor, family member) of having filed a complaint and it having being addressed. Therefore – how can it be signaled to clients on a large scale that it’s important for them to seek resolution?
One thing that will help customers feel empowered is building systems of accountability for FSPs. For example, requiring FSPs to report to regulators certain amount of complains within a period of time, or build incentive mechanisms, encourage spot-checking by third parties (e.g., somebody pretending to file a complaint just to study/experience the process).
How can an FSP overcome the barriers discussed above in order to encourage clients’ right to complain and to respond to complaints?
Aldo Moauro mentioned that a happy client typically shares his experience with 4 people, an unhappy client does so with 9. Further, an unhappy client might leave the institution. Some ways in which FSPs can overcome the barriers are:


  • Improve communications with clients so clients understand they have the right to complain and are aware of the different mechanisms available.

  • Train field staff. Many institutions have dedicated and trained staff (to handle clients complain) at the central office but not in the field.

  • Develop and put in place written policies that explain the process, staff responsibilities, and timelines for responding to complaints.

  • Put in place an accountability system within the institution

  • Disclose the timeline to solve a complain (e.g., 1-2 days to give an answer to the client, etc)

  • Have independent controls to check on awareness of clients about the mechanisms and also check on the effectiveness of the system

Hema Bansal added that institutions need to change their mindsets to see the value of complaints. She also mentioned the importance of having a client complaint mechanism that works for all clients. For example, Ujivan (India) realized that they did not have many complaints so they put in place a role of a person who visits clients frequently and asks them whether they have any complaints. As a result, clients have opened up a lot and the institution has been able to gather valuable data.


How can networks/associations overcome the barriers discussed above?


  • Networks must understand the value of complaints.

  • Have a best practice example of a network to share with others. In Philippines, for example the network has a hotline for all members to communicate with this.

  • Rely on partners for funding.

  • Obtain technical support.

How can regulators overcome the barriers discussed above?


Regulators tend to work at a very high-level and lose sight of the field. CGAP worked with regulators in Ghana. They brought customers from rural areas to tell the Central Bank their stories and share their negative experiences with FSPs. This helped the Central Bank better understand the perspective of the client and the need to be customer-centric. The team developed a map of the different levels of complaints to identify what should be managed at the field, what at the branch level, what at the central office, and what should be escalated to the Central Bank. This map has been turned into a visual that now is being put in place in FSPs offices.
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The room broke into smaller groups to discuss possible solutions or share good examples of good client complaint mechanisms. Participants were asked to come up with both “great ideas” and “crazy ideas”—creative solutions that may or may not be feasible.
The “great ideas” and “crazy ideas” reported were the following:
Great ideas:

  • Empower people to complain – have a campaign with a catchy phrase, e.g., “It’s Ok to complain”

  • Conduct regular field visits to gather client complaints and check understanding of mechanisms

  • Introduce a hotline number or call center

  • Have multiple channels for each FSP

  • Identify influencers among clients and get them to spread the word about mechanisms

  • Categorize complaints and analyze trends

  • Encourage/engage in client education

  • Use IVR on your hotline (interactive voice recording – eg. for x department, press 1)

Crazy ideas:



  • Partner with WhatsApp and similar applications to handle customer feedback

  • Open a platform for complaints with new product launches

  • Reward clients for providing feedback


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