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

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.

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

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  Out of 26, only 5 institutions were compliant with having mechanisms
  
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  Only 30% of institutions had training in place for staff to handle complaints
  
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  But +61% of institutions used the feedback obtained to improve practices and products
  
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  Only 22% effectively monitor the effectiveness of client complaint mechanisms
  
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  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:

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  Cost
  
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  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:

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  Institutions do not prioritize understanding clients
  
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  Selection of complaint channel – Some institutions think that a complaint box is enough. However, complaint boxes tend to not be effective
  
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  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
  
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  Client communication – clients need to understand the channels available to capture their opinion. Otherwise, they will not be effective.
  

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  Insufficient staff training – covering the topic in the code of conduct is not enough, institutions need to provide specific training
  

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  Improve communications with clients so clients understand they have the right to complain and are aware of the different mechanisms available.
  
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  Train field staff. Many institutions have dedicated and trained staff (to handle clients complain) at the central office but not in the field.
  
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  Develop and put in place written policies that explain the process, staff responsibilities, and timelines for responding to complaints.
  
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  Put in place an accountability system within the institution
  
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  Disclose the timeline to solve a complain (e.g., 1-2 days to give an answer to the client, etc)
  
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  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.

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  Networks must understand the value of complaints.
  
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  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.
  
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  Rely on partners for funding.
  
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  Obtain technical support.
  

How can regulators overcome the barriers discussed above?

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  Empower people to complain – have a campaign with a catchy phrase, e.g., “It’s Ok to complain”
  
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  Conduct regular field visits to gather client complaints and check understanding of mechanisms
  
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  Introduce a hotline number or call center
  
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  Have multiple channels for each FSP
  
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  Identify influencers among clients and get them to spread the word about mechanisms
  
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  Categorize complaints and analyze trends
  
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  Encourage/engage in client education
  
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  Use IVR on your hotline (interactive voice recording – eg. for x department, press 1)
  

Crazy ideas:

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  Partner with WhatsApp and similar applications to handle customer feedback
  
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  Open a platform for complaints with new product launches
  
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  Reward clients for providing feedback