Handling and managing complaints effectively is about more than compliance—it impacts profitability, customer trust, and brand reputation. Indeed, superior complaints handling can increase customer loyalty, and smarter complaints management can drive competitive advantage.
The FSCA’s 2025 Complaints Management Thematic Review exposed major weaknesses in how banks handle complaints. These challenges, however, are not exclusive to banking—insurance firms, pension funds, brokerages, telecoms, and medical aids also struggle with effective complaints handling.
Why do so many organizations continue to fall short in this critical area? The FSCA highlighted three recurrent failures, but these are ultimately symptoms of deeper root causes that cut across sectors.
Dealing with the Causes of Complaints Management Failures
- Lack of Standardized Processes and Categorization
Many companies struggle with inconsistent categorization of complaints due to outdated classification methods, undertrained staff, or a lack of shared taxonomy across departments. This inconsistency hinders organizations’ ability to identify patterns, address systemic issues, and comply with Treating Customers Fairly (TCF) principles.
I recall working with large pension fund administrator that grappled with exactly this issue—they had dozens of teams handling complaints, each with its own informal categorisation system which in some cases was tantamount to no categorisation. This chaos made it nearly impossible to consolidate reports or extract useful insights. Through tailored workshops and a new system, we introduced a standardized taxonomy and trained their teams in its application. The results were transformative—better reporting, faster resolution, and fewer escalations.
- Deficiencies in Record-Keeping
Effective complaint management relies on accurate and accessible records. Unfortunately, disconnected systems, manual processes, and a lack of central oversight create gaps in documentation, resulting in data loss and poor visibility of complaint trends. Poor record-keeping is also often driven by time pressures on employees, caused by high complaint volumes, inadequate resources, or misaligned incentives. Additionally, weak performance management can lead to employees neglecting to capture records altogether or doing so in a way that lacks utility.
I remember a particularly challenging case with a short-term insurance company. They relied on an outdated manual logbook system, where staff often forgot to record interactions or lost paper trails entirely. We started by addressing the root causes—resource constraints and staff overwhelm. Then, we introduced an automated central record-keeping system integrated with their CRM. Then we revamped the way they measured their Service Agent performance. The improvement was immediate: cases were tracked seamlessly, accountability increased, and their regulatory compliance risk dropped dramatically.
- Communication Breakdowns with Complainants
A common complaint among customers is the lack of clear, timely updates on their issues. Overloaded teams, poor training in complaints handling, and the absence of automated tracking systems are key contributors. These deficiencies leave customers feeling ignored, frustrated, and less likely to trust the organization.
While consulting for a financial services company, I encountered this exact scenario. I noticed their management avoided the term “complaints,” insisting on calling all issues “queries.” This denial not only downplayed the gravity of customer issues but also discouraged employees from openly addressing and updating clients, especially when the news wasn’t positive.
In contrast, I’d worked with another firm whose Chief Marketing Officer championed a powerful mantra: “Communicate, communicate, communicate—even when you have nothing new to communicate.” He made it clear that even when you don’t yet have an answer for a customer, let them know you’re still working on it, what you’re doing about it and how important they are to you.
By convincing the hesitant management team to embrace the reality of complaints and prioritize clear communication, we saw remarkable results. Escalations due to poor updates dropped significantly, and customer satisfaction improved, demonstrating the undeniable power of proactive engagement.
These root causes reveal a common theme: organizations often fail to view complaints management as a strategic asset. Addressing the FSCA’s findings isn’t just about meeting regulatory requirements—it’s about building trust, driving innovation, and retaining competitive edge.
Brilliance: Empowering Excellence in Complaints Management
Brilliance’s Complaints Management Optimisation services tackle the root causes of ineffective complaints handling, transforming processes to deliver better customer outcomes. Through consulting, project management, training, bespoke systems development, and the Co-iQ SaaS solution, Brilliance addresses challenges such as inconsistent categorisation, poor record-keeping, and ineffective communication. These tailored solutions empower organizations to streamline operations, enhance compliance, and boost customer trust.
Take Action: Future-Proof Your Complaints Management
Effective complaints management is no longer optional—it’s a cornerstone of success for financial services firms operating in today’s competitive and heavily regulated environment. By focusing on this vital function, businesses can strengthen compliance, build lasting customer loyalty, and unlock sustainable growth opportunities.
Contact Brilliance today to discover how our consulting services and complaints management system can help your organization turn complaints into competitive advantage. Visit https://brilliance.co.za/complaints-app-resolven/ to learn more and take the first step toward transforming your complaints management practices.