Posted: 24th April 2018

Based on a speech made by Matthew Drage and Alex Prentice at the Credit Summit 2018

It’s clear that, when it comes to complaints, no matter what sector or industry, the majority of customers who have an issue with their provider simply do not complain.

Whilst this isn’t something that will be new to firms, as part of some in-house research we conducted (part of our Complaints Outlook), we have been able to put some evidence behind the assumptions.

This is what we term the ‘complaints iceberg’. As a firm, you will only see the very ‘tip of the iceberg’ in relation to the number of complaints received.

Now, if customers don’t complain, what do they do instead?

Huntswood’s research has shown that 90% of customers who do not make a complaint still take some form of action that negatively impacts the firm. Considerably more than half of those 90% will mention their dissatisfaction to friends and family; eroding net promoter scores, and more importantly, reducing the view that this wider audience has of the firm’s brand.

An increasing number of customers will also mention the issue on an online forum or some form of social media.

Customers cited the following reasons for not complaining:

  • Not being able to get through to a human being
  • The amount of time required to complain
  • A belief that nothing will happen anyway (a what’s the point mentality)
  • Not knowing how to complain
  • Not knowing or understanding their rights as a consumer

We also asked customers what for them would be the final straw and cause them to leave their provider. What the customer most commonly mentioned was a)a lack of an apology and b) denying that a mistake had been made.

How can you engage both complainants and non-complainants?

We propose three main actions:

  1. Turn complainants into advocates: This can be achieved through an effective complaints-handling process that does what you know you need it to; focusing on fair outcomes and testing whether they are actually being delivered.
  2. Encourage complainers: Where customers have issues, you want them raised so you can fix them, regain the customers trust and prevent that issue happening again. Giving your business a greater insight into the issues affecting customers by removing the barriers to complaints is vital.
  3. Root cause rectification: Proactively put right the issues that cause customers to complain in the first place. How do you do this? Well, the key is the quality of your analysis and then gaining your senior executives’ buy-in to ensure that actions are implemented and tracked through.

Having a well thought out complaints target operating model is crucial for this very purpose.

How does your complaints operating model stack up?

Ultimately, all of the above areas can be addressed through a robust complaint target operating model.

We’ve noticed that there are three areas in particular where firms have struggled in relation to complaints operating models and these are:

  1. Complaints identification has proved to be a significant issue for firms. Trying to assess whether a customer’s dissatisfaction should be treated as a complaint is a relatively subjective test. Staff may not regularly deal with expressions of dissatisfaction or complaint which makes spotting them difficult - and some firms do not capture expressions of dissatisfaction, so staff naturally log any dissatisfaction as a complaint.
  2. Management information which risks being ineffective in cases where complaints are not always identified - thus failing to highlight unfair customer outcomes
  3. Governance and oversight which risks failing to act when risks exceed documented appetite and compliance accountability for complaints is deemed to only be a second line responsibility.

This ultimately reinforces the importance of:

  • A clear complaints definition with:
    • Clear guidance in place, so that staff at all levels know how to apply the definition
    • Clarity over the extent to which firms include materiality and, if so, how this is applied by staff
  • Clear MI which is focused on:
    • The fairness of the customer outcomes being delivered
    • The risks and themes identified via root cause analysis
  • A defined and well-articulated 3 lines of defence model, where:
    • Compliance roles and responsibilities in the 1st line are understood and monitored
    • Transparent governance and committee structures with risk escalation paths and follow on actions are clear, are prioritised and evidenced until closure
  • Finally, having a culture with fair customer outcomes at its heart is vital. Firms should ensure they have:
    • Processes including quality assurance which are outcomes focused
    • Accurate and clear management information which quickly flags potential conduct risks for action identified as part of the complaints handling journey

Testing outcomes should be part and parcel of any operating model

Key to measuring outcomes is recognising that outcomes are separate to customer satisfaction, for example, customers may be satisfied with the outcome received but may be unaware that they have had the most appropriate outcome based on their individual circumstances.

For complaints, prior to measuring outcomes, we would advocate mapping the end to end customer journey and defining the key stages and overarching outcomes linked to your complaints framework. The five stages in the customer journey which we advocate measuring against are as follows, and one example of a question we test against at each stage is outlined below:

Stage in customer journey Example of outcomes testing measures at each stage
Introduction and Access Customers should know what to expect from the complaints process
Fact Finding All necessary information should be fully investigated to establish the nature of the customer’s complaint
Decision  Suitable, complete and balanced information is provided to customers in order for them to understand the outcome of the complaint
Communication Communications are clear, fair and not misleading
Timeliness Customer complaints should be concluded in a timely manner in relation to the nature and complexity of the complaint



As part of any complaints process, efficiency and effectiveness are clearly important considerations. In relation to efficiency, we are increasingly seeing the use of robotic process automation (RPA) within the complaints space. Be it for complaints triage or other automated workflow processes, RPA has the potential to transform complaints handling and to drive efficiency savings.

RPA can also be used to reduce the likelihood of complaints happening in the first place, for example, by removing basic processing errors, reducing administration timescales and improving regulatory compliance

This will allow:

  • A focus for human resource on tasks that need a subjective view.By removing the repetitive parts of processes, firms can focus human resource on the areas where they are able to make the most impact.
  • Cost efficiency. By focusing resource – both robotic and human – where it adds the most value, the cost of executing processes is reduced. On top of this, the cost of dealing with complaint is reduced by virtue of higher accuracy.

Ultimately, the continuous improvement aspects in relation to complaints target operating models is critical. Continuously driving improvement through effective RCA and continuing testing and then learning and adapting processes is vital for continued improvement and driving up customer outcomes, satisfaction and ultimately customer retention.

Automation can support, both as part of the complaints journey, but also as part of ‘business as usual’ processes, helping to reduce the risk of a complaint arising in the first place, but also helping you to achieve a ‘best in class’ operating model.

Having a holistic and efficient complaints operating model is within your grasp

As part of any effective complaints operating model, five key takeaway areas to consider are:

  • Ensuring that your complaints policy, procedures and operating process is documented and aligned to your own definition of complaint;
  • That staff are well trained and understand the complaint handling process;
  • That effective quality assurance frameworks are in place, which also factor in fairness of customer outcomes;
  • That root cause analysis is effective and acted upon; and
  • That Resulting management information is escalated through the correct governance, reporting and oversight arrangements for your firm.

To conclude, encouraging complainants and making it easy to complain is no bad thing.

Revealing the true picture of your ‘complaints iceberg’ is vital to be able to act upon your customers’ demands and needs in a compliant, effective and efficient manner.

Matt drage

Matthew Drage

Director of Advisory Services