Complaints, Consumer Duty, and the FCA: the Key Takeaways for Firms

As the deadline for the next Consumer Duty Annual Board Report edges closer, the FCA continues to release guidance on best practice.

Following the recent publication Complaints and root cause analysis: Good and Poor practice and the joint Call for Input on Modernising the Redress System, it’s clear the FCA’s focus is on complaints handling. This is hardly surprising as according to recent figures 3.64 million complaints were made to financial services firms in 2024.

How can firms align their complaints handling practices to drive better Consumer outcomes?

As part of their review of 40 firms, the FCA highlighted good practice and areas for improvement regarding Complaints Data, Root Cause Analysis (RCA) and Governance.

We’ve summarised some of the key findings from the report below.

Good Practice with Complaints

• All firms captured data to understand the harms their customers were experiencing, with some using MI dashboards to track Consumer Duty outcomes.

• Some firms consulted external sources such as FOS decisions, FCA correspondence and industry news to gain broader customer insights. This can be particularly helpful for smaller firms who may receive fewer complaints.

• Most firms had a framework for carrying out RCA that was set out clearly in policy/process documents.

• Most firms had clear organisational structures, policies and procedures and provided staff training on complaints.

  
  
  
  

Areas for Improvement

• Data quality varied across the firms sampled. Some lacked detailed metrics to assess complaints across different customer groups, especially vulnerable customers.

• Despite conducting RCA, it was not always evident that firms were taking action after identifying harm. This meant firms were missing the opportunity to improve consumer outcomes.

• The FCA wanted more evidence that the person responsible for complaints received the right information to make decisions. The regulator warned against firms sending data to committees as a tick-box exercise with no evidence of further discussion or engagement.

Complaints handling is likely to remain a focus area for the FCA. Effective complaints management is key to maintaining customer confidence, demonstrating compliance with the Consumer Duty and we expect to see greater scrutiny on how firms address customer concerns, so it is worth firms getting it right.

We encourage firms to review their approach to complaints handling based on the FCA’s insights.

How Adempi can help with Complaints

Adempi provides specialist advice and practical support to FCA-regulated firms on Consumer Duty and has a number of Complaints Handling experts. If you’d like to speak to one of the team about Complaints Handling, the Consumer Duty Monitoring or anything else, you can reach us at contact@adempi.co.uk or on 0203 925 4761..