Enhancing User Loyalty Through Intuitive Complaints Management in the BFSI Sector

Published by Cubic Author

Posted on 25/07/2024

Introduction to User Loyalty and Complaints Management in BFSI

Indeed, despite seeking to manage customer relationships, the industry in general does not possess a particularly good reputation for solving these complaints. Currently, many of the traditional providers are on a downhill track, characterized by gradually declining market shares, and mutual trust with the customer is largely reduced. This is as a result of corporate scandal, as well as the company’s poor service, and most typically, its inefficient complaints handling procedures. Furthermore, many complaints undoubtedly trigger the real though infrequently mentioned feeling of the economic irreversibility faced in the relationship. Subsequently, the customer’s effect is to find reliable methods for more efficiently communicating with corporations.

The effective management of customer complaints in the financial services sector is of critical importance. Firstly, user loyalty in the financial services sector is highly correlated with the service quality and complaint resolution. emphasize that delivering upon service quality and complaint resolution in the customer relationship process is one of the key ways to differentiate financial service providers, thereby ultimately breeding customer loyalty. Secondly, the looming shadow of the consumer does not revolve around financial sector sensitivity, but its position is far-reaching. Therefore, the method that a company adopts to identify, classify, and sort customer complaints is a crucial element of its total quality service philosophy.

Regulatory Framework and Compliance in Complaints Management

The BFSI sector has seen a remarkable shake-up with the advent of digital technologies. While user experience (UX) is expected to be top-notch for all the user touch points, glitches in the digital interface tend to mar user experience. One error which is likely to leave a lasting impression on the user is a failed transaction. Users tend to ascribe all the bank-geared hassles to their own transactions and not the ecosystem, technology, or any other entity. Therefore, when things go wrong for users or they are treated unfairly, it impacts their trust, loyalty, and engagement. Therefore, it is in the best interest of banks to empower customers to solve problems, guide them through a failed transaction journey, and demonstrate a sense of accountability. This paper discusses the criticality of the intuitive complaint management procedure in banking and for that matter, in any organization.

In the USA, the Dodd-Frank Wall Street Reform and Consumer Protection Act governs the Bureau of Consumer Financial Protection, which protects consumers from being abused by financial service providers, like banks, credit card companies, and debt collectors. In the USA, the Financial Institution and Customer Protection Act protects the privacy of customer information and security procedures, source and use of credit information with respect to customers, and disclose certain credit information provided or derived by the bank with respect to any customer.

In India, the Reserve Bank of India (RBI) broadly monitors banks to ensure that they establish processes and procedures to deliver services as per established standards. The RBI has also drawn up an ombudsman scheme for addressing customer complaints in the BFSI sector. This scheme is supposed to provide a cost-free, simple, fair, and quick redressal of complaints for the banking public. Banks are expected to treat their customers fairly and responsibly. Treating customers fairly (TCF) is central to the regulatory framework designed by the RBI. It requires banks to design their products and services in a way that will not lead to customers being put at a disadvantage or treated unfairly.

Integration of New Technologies in Complaints Management

The multi-purposive interactive interface of the Internet has provided providers of services with an opportunity to evolve complaints management systems that perform a gamut of functions. In addition, concept technologies such as Web 2.0 and mobile technology have provided providers with tools that make customer service and satisfaction an outcome of customer relationship management systems that address issues and concerns of customers on a real-time or near real-time basis. In a business world where increasingly the placement of orders, making payments, deciding the nature of maintenance operations on assets, problem solving, payment transactions, and formal complaints form but a small part of the multiple purposes of a multi-facet interface, business process operations that interface with the front desk domain are relevant issues that require attention of policy-makers. This chapter looks at these issues in the banking, financial services, and insurance (BFSI) sector.

The protection of the rights of consumers has evolved over the years as consumers took advantage of technology and information to become increasingly aware of their rights. All major upward movements in the consumer protection movement worldwide evolved as a result of continuous and regular feedback on products and services generated from customer complaints. The banking sector in the UK is a case in point. Customer dissatisfaction with the services provided made it imperative for banks to put in place complaint management systems. The Financial Services Authority, the U.K.’s integrated regulator, has developed and put in place a system that uses a combination of statistical analysis and qualitative insights to measure and monitor the extent of customer dissatisfaction with banking services.

Best Practices and Strategies for Effective Complaints Management

An optimal customer complaints management system serves as an institution’s most direct link to its customers. A capable complaints cell has been found to be a critical precursor for any successful customer retention strategy. Managing complaints effectively promotes the perception of fairness and drives customer retention by improving customer satisfaction. An institution earns its customers’ loyalty by engaging them at every level – even beyond the purchase process – by providing them with unique value in a seamless and memorable manner. Thus, giving customers the means to voice complaints is essential for two reasons – one, to understand and address their concerns, and two, to encourage them to consider the organization much more than just a transactional relationship. For the financial industry, effective complaints management positively impacts the customers’ attitudes toward the organization and enhances reputation; conserves corporate resources lost through customer churn; creates competitive differentiation due to superior customer service; and reduces customer response to regulatory interventions, litigation, etc. Such firms also tend to sustain larger market share, customer repurchase, and lower operational costs with fewer staff complaints.

Case Studies and Success Stories in Improving User Loyalty

The damage done due to unsatisfactorily addressed complaints in the banking, finance and insurance (BFSI) sector can be far greater than in any other sector mainly because of the emotional issues involved. On the flip side, the sector that addresses complaints effectively can garner far greater user loyalty than any other sector. In this paper, we look at both the damage that can be caused due to unsatisfactorily resolved complaints and also the gains that can be made for a loyalty perspective with the effective resolution of complaints.

It is important for businesses, across all sectors, to treat complaints as a goldmine because in today’s information economy, this can have a huge impact on the perceived customer value of the business. Therefore, if handled appropriately, customer complaints can be used to harness the “value” aspect of customer value viewed within the VAM framework. A positive outcome and good service recovery strategies can contribute to bringing about greater customer satisfaction and loyalty. This paper studies why service recovery is even more important in the banking, finance and insurance sector. It looks at how technology is stepping in to enhance service recovery in this sector, making the process more intuitive and workflow-based.