This publication aims to guide firms on how to align their complaints and RCA processes with the FCA’s expectations to deliver better outcomes for consumers.

The guidance highlights practical examples of good practices while pointing out common areas where firms often fall short, ensuring firms have a clear roadmap to strengthen their compliance efforts. Below, we summarise key takeaways from the FCA’s analysis, categorised into four critical focus areas: data management, root cause analysis, governance, and policies and training.

Good Practices Identified by the FCA

1. Data Management

   1. Comprehensive Dashboards: Developing detailed management information (MI) dashboards that link complaints data to Consumer Duty outcomes.

   2. External Data Integration: Using data from external sources like the Financial Ombudsman Service (FOS) complaints and social media feedback to identify broader trends.

   3. Granular Insights: Assessing outcomes for diverse customer groups, including vulnerable populations, through detailed data analysis.

      
      

2. Root Cause Analysis (RCA)

   1. Clear Action Plans: Establishing structured action plans with deadlines, designated owners, and measurable remediation steps.

   2. Structured Problem-Solving: Employing tools like the "Five Whys" to delve deeper into underlying causes of complaints.

   3. Outcome Tracking: Measuring the impact of changes made and monitoring outcomes to ensure the effectiveness of solutions.

      
      

3. Governance

   1. Accountability: Assigning clear responsibility for complaints oversight to named individuals.

   2. Board Engagement: Ensuring complaints data is actively discussed at Board and committee meetings with scrutiny and challenge.

   3. Collaboration: Fostering collaboration across teams, such as complaints and compliance teams, to turn insights into action.

      
      

4. Policies, Training, and Procedures

   1. Interactive Policies: Creating accessible and interactive policies that include practical examples for staff.

   2. Scenario-Based Training: Mandating detailed training with scenario-based learning to prepare staff for handling complex cases, including those involving vulnerable customers.

      
      

Poor Practices to Avoid

1. Data Management

   1. Limited Granularity: Using complaints metrics that lack depth, failing to capture trends among different customer groups.

   2. Operational Focus: Reporting that prioritises operational efficiency over improvements in customer outcomes.

      
      

2. Root Cause Analysis (RCA)

   1. Compliance-Driven RCA: Treating RCA as a mere compliance exercise without monitoring the impact of corrective actions.

   2. Superficial Analysis: Conducting RCAs that fail to uncover systemic issues or recurring trends.

   3. Lack of Feedback Loops: Neglecting to evaluate whether implemented changes effectively resolve underlying issues.

      
      

3. Governance

   1. Undefined Responsibilities: Absence of clear accountability for complaints within organisational structures.

   2. Minimal Engagement: Treating complaints reporting as a tick-box exercise with limited action or follow-up.

   3. Poor Documentation: Failing to document Board or committee discussions, hindering accountability.

      
      

4. Policies, Training, and Procedures

   1. Outdated Policies: Failing to update policies and procedures to reflect Consumer Duty requirements.

   2. Generic Training: Offering overly general training that does not include practical, scenario-based examples, leaving staff underprepared.

      
      

Key Takeaways for Firms

The FCA’s publication serves as a valuable resource for firms striving to align their complaints handling and RCA processes with Consumer Duty standards. Firms should focus on leveraging data, implementing structured RCA frameworks, fostering robust governance, and providing detailed training to ensure meaningful improvements in consumer outcomes.

The FCA expects firms to not only adopt best practices but also to avoid common pitfalls highlighted in the report. By doing so, firms can build trust with their customers, improve operational resilience, and reduce regulatory risk.

For more detailed guidance and examples, the FCA's full report is available here.

How j. awan & partners Can Help

At j. awan & partners, we specialise in governance, risk, and compliance solutions to help firms navigate complex regulatory landscapes. Our team of experts can assist with implementing effective complaints handling processes, conducting root cause analysis, and aligning governance frameworks with Consumer Duty standards.

Contact us today to learn how we can support your organisation in meeting FCA expectations and delivering better outcomes for your customers.