FCA Focus – Resolving Complaints & Meeting Guidelines through RCA

Whatever the financial sector, we are all operating in a business environment of remarkable complexity and growing uncertainty. This, together with increased scrutiny and intervention from clients, media or regulators, has encouraged senior professionals and strategic thinkers in financial services to seek out effective problem solving methods to handle complaints and resolve disputes.

Sologic’s Root Cause Analysis is the most comprehensive and versatile structured problem solving technique available. Methodical, logical and evidence-based, Sologic’s method can be shared across disciplines and sectors, enabling it to become a company-wide process.

For Financial Services, operating alongside strict regulatory bodies, the Sologic RCA method helps establish more rigorous models of best practice, alongside improved compliance and reporting. Unsurprisingly, firms who adopt the method also discover that Sologic RCA ultimately becomes a powerful tool for continual improvement and for resolving disputes and winning new business.

So, let’s look at what the FCA say about Root Cause Analysis and in particular how it should be used to demonstrate if a firm is handling complaints correctly.

Are you confidently meeting FCA DISP 1.3 Complaint Handling Rules and DISP 1.4 Complaint Resolution Rules?

The FCA Dispute Resolution: Complaints(DISP) rules require that financial firms take steps to identify and remedy any recurring or systemic problems which lead to complaints. ‘If a firm receives complaints about its sales of payment protection contracts it should analyse the root causes of those complaints.’

That is, you must demonstrate that as a financial firm you:

– Are investigating the complaint competently, diligently and impartially, obtaining additional information as necessary;

– Have established, implemented and maintained effective and transparent procedures for the reasonable and prompt handling of complaints.

However, it is also important to remember that beyond merely complying with these rules, the feedback that you get from customers who make a complaint is information you might not otherwise find out. This information is a view of how you are performing in the eyes of the people that matter, in the eyes of the people that pay you for your goods and services.

So how are you going to ensure that you comply with these rules and make the most of this information from your customers?

How can Root Cause Analysis (RCA) help you?

A simple, yet structured and systematic Root Cause Analysis (RCA) process can:

– enable you to understand and effectively deal with a customer complaint
– yield the information to demonstrate that you complied with the DISP rules
– provide the organisation with intelligence from which to learn and benefit
– enable you to report your findings in an accessible, timely and concise manner

What might this effective, structured and systematic RCA process look like?

Step One – Gather and Manage Data

· What are the sources of data and evidence for this problem?
· Who can provide this data?
· What is the quality of data?

Step Two – Create a problem statement
· What is the focal point of your analysis?
· If you don’t know precisely what problem it is that you are solving, how will know when you have solved it?
· What impact has this problem had on the organisation? This will help you to determine how much resource you want to dedicate to the problem solving.
· What damage could this problem potentially have caused the organisation?

Step Three – Cause and Effect Analysis
There are many advantages to charting your analysis. The visual nature enables you to review and question your logic, pushing analysis beyond the symptomatic level to a deeper analysis.
· What caused this problem to occur?
· In most — if not all — cases, a problem has more than one cause so you need to ask: Every time this cause occurs will it always have this effect?
· Have you got both change points and systems, processes and environment represented in your cause analysis?

Step Four – Identify and implement solutions
You can now use the visual, charted analysis of causes to undertake a structured brainstorm.
· How can you change, contain or eliminate the causes that have created this problem?
· Will this solution be effective at eliminating the problem?
· Will it be easy to implement?
· Will the solution give a good return on investment?
· Will it cause us other problems?

Step Five – Produce the final report
· Have you provided your analysis? This is much easier for your audience to understand when it includes the visual chart as well as a summary of the findings.
· Is your evidence clearly linked to your analysis?
· Are your solutions clearly identified against these findings, along with your evaluation as to why they are recommended?

As you can see, this systematic, step-by-step process is sympathetic to the logical processes that underpin accountancy and financial services. Furthermore, it exceeds the expectations of even the most demanding regulators. No method is more effective in identifying and addressing the multiple causes of both recurring and one-off complaints. Nor is there a more effective way to deliver evidence-based solutions that have an immediate and lasting impact.

It is absolutely crucial to ensure that an RCA is undertaking effectively. The ICAEW state, correctly, that; ‘RCA that is not sufficiently robust may not identify the real root causes for findings. If the wrong cause is identified, the wrong remedial action will be taken.’ The negative impact on resources and performance of such an activity can be substantial.

Please do not hesitate to contact us if you would like to know more about Sologic RCA and the ways in which we can help your organisation investigate incidents, solve problems and reduce risk. We provide in-house and public training courses, backed by Causelink the most effective RCA software in the world.