FCA streamlines complaints reporting requirements for firms

The FCA says 10,000 firms will find it simpler to submit data on the complaints they receive under new proposals to improve the complaints reporting process.

The regulator plans to consolidate five current returns into one, which it says will also improve the quality of the data it receives, helping it to identify potential harm to consumers faster.

The FCA will also standardise the number of times it asks regulated firms to send their data returns so that the timing of requests is more predictable. 

The FCA says the changes will help firms to plan more effectively, as well as helping it process information more consistently.

The latest plans follow proposals from the FCA last month to simplify reporting requirements for 16,000 firms. 

Sarah Pritchard, the FCA’s executive director for supervision, policy, competition and international, said: "Streamlining the complaints data reporting process will ease unnecessary burdens on firms and strengthen our commitment to smarter, more effective regulation. These proposals will also help us collect better quality data on complaints received by firms which will help us spot and respond more quickly to harm as it arises."

Dom House, lead consultant at Simplify Consulting, commented: “The FCA complaints review announced today represents a step forward for complaints processes.

“Simplification of complaints reporting should help firms who are currently completing multiple returns to reduce the burden of collation and submission, and should reduce the risk of mis-reporting.

“In addition, and perhaps the biggest improvement in how complaints are viewed across the industry is that this will enable complaints data to be processed more efficiently by the FCA. As data becomes more important across the industry, and at the FCA itself, improvements to the quality and availability of the data should enable firms to make better and smarter comparisons with where they sit within the market and against their peers. With the evolution of Consumer Duty more and more firms will be looking at this data to identify where their areas of focus should be.

“While complaints to the FCA in 2024 H2 fell to 1.78m, this represented just a 4.3% decrease from 2024 H1 and remains disappointing overall.

“Complaint volumes across all FCA regulated firms have continued, on average, to increase over the last 10 years but now, around 22 months into Consumer Duty, it seems the industry is still to move the dial significantly when it comes to customer complaints. Our own research into this area found that 76% of complainants said it had impacted their loyalty to their provider, with 18% having moved provider as a result of their complaint.

“To my mind, financial firms that can build an effective complaints strategy, analysing the root cause of complaints rather than relying on over-arching regulation, will not only be delivering better outcomes for clients and be meeting Consumer Duty requirements, they might well reduce the risk of losing a large proportion of their clients.”