■ ■ internal Alignment: A crucial standard in a complaint management program is alignment between the way customer
complaints are handled and the bank’s customer service standards. If the bank’s standards empower frontline employees to
provide the highest standard of customer service, always act
in the best interest of the customer, and act with a sense of
urgency in responding to customer needs, complaint handling
must align with that standard. Don’t attempt to centralize
complaint handling because it will likely impact the level of
customer service a bank’s frontline employees can provide. But
try to centralize complaint management program standards to
ensure that handling is consistent and appropriate. In addition,
centralize the oversight of responses, tracking, monitoring,
and reporting of at least the high-risk consumer complaints
to allow for real-time risk management. Make sure each of
these complaints are thoroughly researched and investigated
to determine root cause, and, just as important, take action
if root cause points to a bigger issue than just the individual
problem. Document the results of complaint investigations
and the corrective action, when applicable.
dealing with the exam
Will the establishment of a formal complaint management program give the bank a pass in its next exam? It won’t by itself. The
bank will need to prove the program is working. If the bank is not
tracking all complaints, then the definition of what complaints
should be escalated for formal investigation, resolution, tracking,
and monitoring should demonstrate that a sufficient number of
complaints are escalated and submitted for centralized oversight.
The bank should be able to demonstrate that the handling of the
complaint led to an appropriate resolution for the customer and,
when applicable, the information from the complaint was used to
improve or fix a process, system, product, or service. For instance,
a bank might have fixed a loan payment problem for a customer
who submitted a written complaint. At the same time, the bank
uncovered that loan payments for other customers were also not
being appropriately processed as a result of a breakdown in part
of the loan payment process. Or the bank could have replied to
the customer who complained that he did not understand why
he was being charged an account service fee when he thought
he had enough in his account to meet the minimum balance
requirement. That experience let the bank revisit its Truth in
Savings disclosures and provide more clarity about minimum
balances and fees.
Of course, the nuts and bolts of a complaint management
program can only do so much. The real value of a formal pro-
gram is employee awareness of how it works and why it’s so
important. Frontline employees who receive complaints should
be included in the complaint management process, investigations,
and corrective actions. Knowing how one complaint led to a fix
or improvement in a process, system, product, or service can have
an impact on how that employee handles the next complaint.
Linking complaint management with social media monitoring
is also key. Just as a formally submitted customer complaint can
be the canary in the coal mine to a bigger issue, so can comments
made by customers or consumers in social media. Because these
comments are not necessarily confined to bank-sponsored social
media sites, monitoring comments in the broader social media
arena is advisable. Even small banks should have a monitoring
system in place to know what people are saying, whether it’s good
and bad. Social media monitoring can enhance a bank’s real-time
risk management because potential problems can be recognized
before formal complaints are submitted.
ABOUT THE AUTHOR
ELIZABETH CLARKSON, CRCM, CAMS, is senior vice president
and chief compliance officer for Portland, Ore.-based Umpqua
Bank. Clarkson has more 18 years in banking and broker-dealer
regulatory compliance risk management and training. She
currently holds the Anti-Money Laundering Specialist
designation, as well as, series 7, 63, 24, 65, 53, 4 FINRA licenses.
Clarkson currently manages a team of compliance professionals
in a centralized and decentralized compliance management
system model for Umpqua Bank and Umpqua Investments.
Clarkson works, lives, and plays in Vancouver, Wash.,
just outside of Portland, Ore. Reach her by email at
lizclarkson@umpquabank.com.
