As I speak with financial services executives throughout the industry, I listen to their challenges and explore their hidden opportunities for growth. While most are committed to listening more closely to their customers, they continue to share a similar approach to how they manage their customer complaints. Financial institutions work hard to resolve their customers’ complaints within a prescribed amount of time, based on either business or regulatory requirements. However, they rarely view complaints systemically or holistically as assets.

I believe that financial institutions are missing out on a massive business opportunity. Complaints are a hidden source of value. When seen as a strategic asset, complaints can become a critical part of a business’ success as any complaint can be unpacked for value. Intimate access to complaint data can proactively identify issues before they create a headline or regulatory risks, and even predict and prevent future problems. Prevention is a direct outcome of using your customer complaint data to surface business opportunities for growth.

How do I know this? Over the past 12 months, my team has developed and applied an integrated toolset of advanced technologies, analytic methods, and human intelligence to study Consumer Financial Protection Bureau (CFPB) data, treating it as such an asset. We took a deeper look at issues concerning the entire financial sector. One such issue is data breaches, and specifically the Equifax breach. Among our findings, we see that:

1. Signs of the Equifax breach were evident at least 6 months before the media covered it.
2. Once the media brought attention to the breach, consumers began to adopt and integrate the media’s language into their direct dialogue with multiple institutions.
3. Consumers submitted duplicate complaints, providing deeper insights into the severity of issues and mistrust in our institutions, and impacting businesses in a widespread manner.
4. There is an ongoing halo effect from this data breach impacting all financial institutions, even 12 months after the Equifax breach.
5. Consequences vary by institution and can be predicted far enough in advance to reduce their severity.
6. By combining proprietary financial institution data with publicly-sourced data, specific actions can be customized and implemented.

I found it surprising, then, that a recent article in American Banker challenged the validity of the CFPB’s data, claiming that it presents an inaccurate number of complaints because it frames inquiries as complaints, too. The article’s author wrote:

“When the CFPB fails to contextualize and present fair, accurate data that appropriately frames the number of complaints compared with the volume of contacts, or to separate mere inquiries and complaints about other industries, inaccuracies multiply and the debt collection industry ends up facing unfair reputational harm.” 

My team’s analysis has revealed that just the opposite is true. The CFPB is a valid source of data that needs to be taken seriously. When people turn to the CFPB with a complaint or an inquiry, they have an issue that hasn’t yet been resolved. Your customer’s voice is your most valuable asset and this data holds hidden opportunities.

All data sources are messy. That does not negate their potential business value. Cleaning and structuring the data are always necessary first steps to analyzing what your customers are telling you, extracting insights, and turning those insights into predictive indicators, broad-based strategies, and drivers for improved performance. Defining the contextual framework for the application of the CFPB data and building statistical rigor and robust predictive tools through its use is key to unlocking its value.

At Tal Solutions, we believe that negative input can have a positive impact. We’re focused on turning customer complaints into a source of business value. I’d be happy to share more about what we are learning from our conversations with executives and customers, how we’re finding value in complaints, and how our findings can directly benefit your work. Please feel free to reach out.

Customers have always complained. And always will.

Their voices have never been louder. Complaints about products and services are more public, with far-reaching consequences. And the cost of ignoring them in the financial services industry continues to increase.

How much do you really know—through facts, data and analysis—about your customers’ complaints?

In the video below, I share actual customer complaints (raised to the CFPB) within an analytic framework for complaint detection and prediction.

Apply this robust and multi-dimensional framework to analyze what your customers are telling you. You’ll uncover new opportunities from using science, listening to consumers’ voices and always being human!