The financial services industry needs to prepare for an increase in customer complaints through the use of social media, according to Equiniti.
Social media will rise dramatically in importance from mainstream methods of complaining, such as telephone and email, with the number of complaints via social media expected to rise from 10 to 28%.
Research from Equiniti found that social media is a clearly emerging complaint channel within the industry, currently representing around 10% of complaints, with its importance growing. However 42% of respondents believed they would be able to handle consumer complaints more efficiently if the FCA relaxed its rules relating to social media, which could help them more effectively engage with their customers.
Telephone and email (with both channels representing 37% of complaints) are expected to remain the biggest complaints channels, but their importance will have decreased relative to social media over the next five years. The number of complaints by post is expected to fall from 25% to 18% and in person from 14% to 12%.
The broadening of avenues for people to express dissatisfaction, which could include new forms of social media, is expected to have the greatest impact on complaint volumes (44% of respondents), followed by an increased propensity for people to claim (40%) and an increase in regulation (16%).
Adam Green, Chief Risk Officer for Equiniti, said:
"Our industry needs to be prepared for an increase in the speed of customer complaints, changes in the way customers complain and for complaints to become more visible through the use of social media.
“The immediacy of social media will continue to change the dynamics of complaint handling. It presents exciting opportunities for companies to publically stand out in the way they engage with their customers and address customer questions and concerns. Companies who are slow to respond to these changes risk losing customers to more ‘in touch’ rivals and potentially weakening their brand.
“Changing attitudes and increased use of technology means the financial services industry needs to continue to rise to the challenge of greater complaints transparency. Demonstrating understanding and empathy with customers, backed up by robust systems, will become a true differentiator for agile companies."