The Secret Strategic Value of Complaints

While no single rule dictates how credit unions must handle consumer complaints, regulators have provided plenty of guidance around best practices. And, if recent exams are any indication, expectations for adhering to those recommendations are crystalizing in the minds of examiners, stimulating many more questions during exams. This may be due to an increase in class action lawsuits, the Inspector General’s recent concerns about complaint data or the general chaos of COVID-19 and its various economic and workplace stressors.

Regardless of the root cause, increased regulator attention to complaints management is something to which all credit unions should be paying close attention.

Beyond seeing the trend solely as a threat, however, credit union governance, risk and compliance (GRC) leaders can also think of it as an opportunity. When viewed through a strategic lens, complaints from members, the public and employees create space for conversation around getting better – at everything from compliance management to serving members.

Here are a few things to keep in mind as your credit union positions itself for success with all stakeholders in the realm of complaint management.

Tracking Prevents Risky Trends From Flying Under the Radar

Half the battle of successful complaint management is aggregating issues. Often within the credit union industry, good-natured employees rightly focus on solving a member’s issue as quickly as possible. While one-call resolution certainly ticks all the right member-experience boxes, it can lead to inadequate reporting and tracking of the complaint. When this happens frequently, emerging trends fly under the radar. These trends can be external, such as confusing language in a promotional email, or internal, like an employee consistently failing to fulfill their duties.

Because risk goes up when complaints are not monitored at the enterprise level, credit unions need to focus on tracking all aspects of a complaint, from the initial notification through resolution, in a single spot that can easily be analyzed for patterns.

Automation Halts Resolution Pileups

For every one-call resolution a credit union experiences, there can be 10-plus complex issues that require much more attention. Depending on where they originate and to which individuals they are routed, complex complaints can begin to stack up. Because examiners are asking more questions about operations around corrective action, it’s important for credit unions to have an air-tight and documented complaint management process in place.

Implementing GRC automation technology to better manage the time-intensive pieces of the workflow (like dozens of follow-up emails to different people, each responsible for different steps) is an emerging best practice. It enables GRC leaders to focus on (and solve) larger, global problems. Additionally, automation significantly cuts down on pileups that may otherwise draw unwanted attention from examiners.

A Designated Owner Accelerates Analysis & Communication

Aside from using technology to aggregate and automate pieces of the complaint management process, it’s a good idea to assign ownership of the initiative to a single leader. Although many hands make quick work, and certainly complex complaints require teamwork, it’s ideal to have one individual who both understands the strategy and can easily pull data from reporting technology to communicate patterns to management. In most credit unions, this will be a compliance or risk officer. However, with the right mix of human and technology expertise to support the process, monitoring for trends among complaints can even be among the CEO or executive admin’s responsibilities.

Not All Complaints Are Equal

Retooling a complaint management strategy for better monitoring, analysis and resolution can seem overwhelming. We advise our clients to remember that not all complaints require the same level of attention. An uncomfortable set of lobby chairs, for instance, should not take as much manpower to address as perceived discrimination in lending practices. That said, having the all-in vision on both types of issues can guide a credit union through a good-to-great transformation much more efficiently.

When members speak, credit unions listen. It’s part and parcel of the credit union difference. At the same time, the ever-expanding set of channels through which credit unions engage with their members, the public and employees are cranking up the volume, variety and velocity of complaints. What’s more, the influence of digitally savvy fintech providers is reshaping consumer expectations around financial services experiences, opening the door for more comparison-based complaints. This is to say compliance is not the only area of the credit union that stands to benefit from improved complaint management. The cooperative as a whole will evolve and grow as it gets better at strategically listening and responding to the community it serves.

Erin O’Hern is vice president, strategic initiatives for governance, risk and compliance technology firm ViClarity, formerly PolicyWorks, LLC, based in West Des Moines, Iowa.

Jeremy Smith is director of client partnerships for ViClarity.