The new FCA complaints report reveals a reduction in PPI and travel insurance complaints, but new increases in pension and investment products complaints.
In the first half of 2021, further significant reductions were recorded in the volume of complaints concerning Payment Protection Insurance (PPI) – according to the latest data from the Financial Conduct Authority (FCA).
PPI complaints fell to a new half-year low of 56.619, down 78% from the 256,416 recorded for 2020 H2. This is a huge reduction of 97% on the figure of 1.93 million complaints just one year ago (2020 H1) and clearly demonstrates the progress the industry has now made in addressing a longstanding and challenging issue.
Elsewhere within the insurance and pure protection product group, there was a welcome fall of 63% in the volume of complaints relating to travel insurance from H2 2020 to H1 2021 – reflecting a sharp reversal from last year’s complaints spike driven by Covid-19.
Excluding PPI, overall complaints recorded by the FCA rose by 2.6% (50,000) to 1.98 million in 2021 H1 when compared with 2020 H2. There were significant increases over the period in the number of complaints concerning decumulation & pensions (26%) and investments (18%) – both these trends now go back over a period of years. However, investments also registered a slight fall in complaints per 1,000 accounts in force in the half year, from 1.9 to 1.8.
The most complained about products in 2021 so far are current accounts (25% of the total), “other general insurance products” (15%), credit cards (11%), and motor & transport insurance (10%).
“Overall, standard banking products continue to produce the highest numbers of new complaints about financial products in 2021. And since the steep drop in PPI complaints in 2019, mortgage products now consistently register the highest number of new complaints relative to the number of accounts in force”, notes Matthew Westaway, co-founder and CEO of Voyc.
In fact, home finance tops the table Westaway refers to by a considerable margin. with 8.6 complaints per 1,000 accounts in force in H1 2021. Although that is a reduction (of 1.0 per 1,000) on the figure for H2 2020, it is still much higher than the product group in second place: insurance & pure protection at 3.5.
Decumulation & pensions complaints also increased significantly per 1,000 accounts in the half year – up 21% from 1.4 to 1.7.
“Once again, the data serves to highlight potential concerns in specific product areas”, says Westaway. “In the latest figures, home finance remains noteworthy relative to the number of accounts in force. This is no doubt driven by the ongoing surge in new mortgage applications and completions in the UK. In fact, total advances have more than doubled in the past 12 months, largely driven by home moves related to the pandemic.
Sonya Homewood, CEO of Biz2blu adds: “The volume of complaints regarding pension products also stands out in the latest data. At 1.7 per 1,000 accounts in force, it is the highest level recorded in the figures that go back as far as 2016. This is likely to be related to the new “pensions freedoms” introduced in 2015. As increasing numbers of customers affected by these changes approach and reach retirement, pension firms are likely to see an increasing demand for personal service, with the added potential for higher complaints in the future.
Nick McDonald, a co-founder of The Compliance Guys, summarises the data’s message as follows: “The huge variety in financial products now governed by the FCA and the ever-increasing number of channels through which customers are targeted combine to bring challenges to the regulator as well as provider firms. Customers often find themselves confused by the barrage of information. This makes it difficult to choose the best provider or introducer and so firms must ensure that the products offered truly suit the needs of their customers. Firms also need documented proof of this so that they don’t become the headline that results from these statistics.”
Voyc uses speech analytics artificial intelligence software to help financial services firms identify customer complaints in contact centres immediately and escalate them without delay. This ensures that complaints are resolved quickly – improving the customer experience and reducing the number of cases that become expensive formal complaints.
In addition to delivering improved complaint outcomes, Voyc helps financial services firms to identify vulnerable customers, monitor and manage the performance of contact centre agents and create new operational capacity to drive better customer outcomes.