Key Insights from the FSCA’s Industry Review

The Financial Sector Conduct Authority (FSCA) recently released its Complaints Management Industry Review Report, highlighting how South African institutions are managing complaints and where urgent improvements are needed.

Why the Review Matters

The FSCA assessed how institutions comply with the FAIS Act, Treating Customers Fairly (TCF) principles, and the Conduct Standard for Banks. The review aimed to uncover systemic weaknesses, public opinion around complaints processes and opportunities to improve complaints frameworks and compliance

Industry Review (Phase 1)

The FSCA uncovered major inconsistencies across the industry.

Key Issues Identified

• The absence of centralised tracking systems

• Failure to acknowledge complaints within prescribed timelines

• Unclear internal escalation procedures

• Incomplete or inaccurate data reporting

• Product and service-related complaints

• Billing and administrative issues

• Inconsistent responses and delays due to a shortage of dedicated complaints handling staff

These issues highlight the need for better processes, training, and transparency.

Consumer Survey: Key Findings (Phase 2)

Consumers showed high levels of dissatisfaction with the financial institutions’ complaints handling processes. Consumers experienced prolonged resolution times, sometimes exceeding regulatory guidelines. Over half of consumers regretted taking up a financial product or service due to poor complaint handling. Many consumers further reported dissatisfaction due to a lack of transparency in how complaints decisions were reached and that they had very low awareness of their complaints handling rights as consumers, highlighting the need for increased public education.

Suggestions by Consumers

Consumers pointed out that improved overall customer experience, regular updates on their complaints as well as their complaints being resolved in a timely manner, while still being investigated thoroughly would result in improved customer satisfaction.

Complaints Data Analysis and Ombud Engagement

Beyond complaints themselves, the FSCA found broader gaps such as organisational commitment, weak monitoring, evaluation, prioritisation and management of queries, limited accessibility and awareness for customers and staff as well as mismanagement of queries

Recommendations

1. Improve Effectiveness

• Standardise categorisation of complaints to ensure consistency with regards to capturing, recording and reporting

• Seek regular feedback from clients and staff

• Document internal escalation processes

• Train staff specifically on complaints handling

2. Improve Accessibility

• Provide clear educational resources to clients (FAQs, videos)

• Improve visibility of complaints channels

• Explore methods to communicate essential details about complaints management to the FSCA

3. Improve Timeliness

• Implement SLAs which define response timelines and improve accountability

• Establish and track timelines for addressing complaints

• Implement automated tracking systems to improve efficiency and accountability

Conclusion and Next Steps

The FSCA confirms that it will continue to monitor financial institutions’ progress in implementing the recommendations outlined in this review and will conduct ongoing industry engagement to address complaints trends and ensure continuous improvement in this regard. It is important to take note that further regulatory interventions may be introduced based on the findings of future reviews and consumer feedback.

We will be there to assist should any guidelines be issued in this regard but nothing is required for now.