EFFECTIVE COMPLAINTS MANAGEMENT SYSTEM CRUCIAL FOR BANKS - PART ONE

By Kelvin Mkwawa, Seasoned Banker.

In the banking industry, excellence in customer service is the most important tool for sustained business growth. In addition, as a service organization, customer service and satisfaction should be the prime concern of any bank. By providing prompt and efficient services, banks will able to attract new customers and retain existing ones. One of the major aspects of ensuring excellence in customer service is the management of customer complaints. Customer complaints are part of the business life of any bank and therefore managing those complaints is very important for banks. A customer complains because he /she is not satisfied with the services or products offered by a bank. Customer complaints arise mainly because of the inadequacy of the functions /promises made to customers or gaps in the standards of services expected and actual services rendered. Banks need to understand that customers have a right to register/report their complaints if they are not satisfied with the services or products provided by a bank. Complaints can be registered on different platforms: in writing, orally or by telephone. Banks should have complaints management systems in place to ensure that customers have access to all platforms to raise their complaints. Banks must ensure that customers are fully aware of all avenues to escalate their complaints within the bank and the rights to alternative remedies if they are not fully satisfied with the bank’s response to their complaints.

Nevertheless, banks can minimize instances of customer complaints and grievances through proper service delivery and review mechanisms to ensure prompt redress of customer complaints. The complaint review system should help in quickly identifying shortcomings in services and product features. Responding to customer’s complaints is considered by many as an essential task of customer service but, banks should have a team comprising of members from all units, not just the customer service unit, that deals with customer complaints. Each person involved in the complaint management process must prioritize the needs of customers and understand that complaints are helpful, not harmful. Complaints help banks to detect flaws in their products and services hence improve quality. Every complaint received should be looked at as an opportunity to show customers that their time and opinions are valuable. Through the next two weeks, I will share why it is crucial for banks to have an efficient and effective complaints management system and how to set it up. This week, I will share why it is crucial for banks to have an effective complaints management system.

• Improves Accountability - For a bank to have a meaningful and effective complaints management, a structured system needs to be built. A complaint management system is more effective and efficient when it has procedures that are precise, detailed and well-documented. Such a system makes sure that the complaints are addressed quickly, fairly, and in customer’s best interest. In addition, the guidelines of the complaint management system should be made available to all staff (main office and branches) to ensure awareness through the entire bank. That awareness will allow the complaint management system to obtain feedback quickly on how to improve banks’ services, therefore, decreasing the likelihood of problems with their customer base. By decreasing the likelihood of customer’s problems, a well-structured complaint management system can improve accountability by making sure that customers’ expectations are met and ensure that the products and services that banks are offering are continuously being improved.

• Enhance Good Governance - A customer complaint management system is an effective tool to enhance good governance. Without an effective complaint management system, and lack of awareness about the rights and responsibilities of banks and consumers, customers can’t seek help whenever there is an issue. By unveiling quality problems, complaints management system might help to detect illicit practices as these are often resulting in low quality and efficiency. Therefore, by promoting rights and responsibilities of consumers regarding the complaint, banks will have no choice but to have a complaint process that is transparent, fair, and intact with the policy and procedures of handling complaints hence enhance good corporate governance. 

Written by Kelvin Mkwawa, MBA
Seasoned Banker
Email address: Kelvin.e.mkwawa@gmail.com