On 11 December 2024, the FCA published its findings following a review into firms’ approaches to complaints and root cause analysis. The FCA has also set out good practice and areas for improvement.

Understanding and monitoring the outcomes customers are experiencing – and acting where there are problems – is an essential part of meeting the requirements of the Consumer Duty. It allows firms to track patterns over time and look at outcomes for different customer cohorts.

Complaints data is one type of data firms can use to understand the outcomes their customers are experiencing. Chapter 11 of the FCA’s Finalised Guidance (FG22/5) sets out further detail on its expectations on monitoring outcomes.

Background

The FCA’s review covered 40 firms across a range of sectors. Insights were also informed by data provided by firms through an information request issued in January 2024 together with a range of other data sources. The purpose of the review is to support effective embedding and implementation of the Consumer Duty and firms have asked the regulator to publish thematic best practice and areas more regularly.

Findings

Of the sample of firms reviewed, the FCA has identified a key area of good practice with firms having established processes for carrying out root cause analysis of complaints management information (MI) – that is, identifying the trends and themes of complaints. Most firms could evidence clear escalation routes and accountability, meaning everyone across the business knew where to send MI and other information.

The FCA has also identified three key areas for improvement:

  • Analysing data for different customer types. Though complaints MI was captured, this was not always granular enough to tell the firm about the outcomes for different groups of customers, including those with characteristics of vulnerability.
  • Taking action based on these insights. It was not always clear whether there had been appropriate discussion on the data at decision-making forums and what actions would be taken.
  • Assessing and measuring the impact of these actions. Firms did not always measure the impact of interventions they had made to ensure these were the right changes to make.