Why Does How You End A Relationship Matter?

What’s the best way to leave a job? What’s the optimal way to end a professional relationship? My mother always advised me to keep the door open — just in case I want to return one day. “Things change and you never know what the future might bring,” she told me.

The same maxim can be applied to account closures. In financial institutions, an account closure occurs when either the institution proactively closes a customer’s account, or when the customer chooses to close their account. While not all account closures are easy and banks might expect customers to complain when the bank initiates the closure, banks want the account closure experience to be as seamless as possible.

After all, just because your customers’ accounts close, doesn’t mean they won’t want to reopen their accounts in the future. So, how can financial institutions ensure a positive ending that leaves the door open?

To find the answer to this question, we explored over one million complaints in the PositivityTech platform — identifying customers’ complaints about account closure and predicting their future risk. (Both steps are critical to understanding why customers’ accounts close and what your actions should be.) Ultimately, we learned that negative input can have a positive impact.

Here are the steps we took:

Identify the pain points associated with account closure.

Within the PositivityTech platform, we identified seven sub-issues in customers’ complaints about account closures — those initiated by institutions and customers. These sub-issues include, for example, “change in terms” and “fees charged for closing an account.” Below are two examples of customer complaints about account closure. We have hidden the identities of the banks mentioned.

“I received a credit card from [X Bank] that I did not request. I have called twice to request that the account be closed and both times, they refused to honor my request without me giving them my social security number. I refused to give this information out… My credit file was frozen several months ago to prevent fraudulent applications. I don’t know how this application was processed despite the freeze. The company suggested that I walk into one of their branch offices to get a telephone number for their credit fraud department rather than trusting the number on unsolicited mail. There are no service branch offices near me.”

“I initiated opening an account with [X Bank]. Today, an account closing was initiated by the company. I noticed what was done when checking my account online. I then called the bank to find out what was going on. According to a customer service representative, the account was closed due to suspicious activity. No further details or explanations could be given on the case because not enough information was available to the representative. The company failed to inform me of their actions and completely disregarded me as a customer. The company then charged me a whopping $25 closing fee.”

Understand the severity score of these customer complaints within these specific pain points.

The specific pain points driving these customer complaints have a PositivityTech proprietary severity score that is 6-8% worse than that of the average complaint.

Predict the likelihood of these customers going into debt collection.

The PositivityTech platform’s proprietary debt collection score reveals scores that are 76–95% lower than the mean. Interestingly, customers who complain about their account closure pose a low credit risk to financial institutions.

Predict the likelihood of account closure.

Each of the seven sub-issues show a very high likelihood of account closure, even while they reveal a low threat of future risk.

Prevent bad relationships with customers who close their accounts.

Customers who complain about how they are treated when their accounts are closed — and customers who do not complain — pose a low risk of not paying. In fact, they present a hidden segment opportunity for financial institutions to win back profitable customers.

While customers’ pain points are not significant in volume, they are very significant in severity and in predicting account closure. In one institution, we found that one of the strongest predictors of account closure was present in only 3% of all customer complaints.

Flip the script on customer complaints about account closure.

By exploring customer complaints about account closure, we were able to pinpoint past customers’ potential for future business opportunities. Understanding and addressing the root causes of these complaints can reduce customer churn and even alleviate future customer frustrations.

With the PositivityTech platform, customer feedback fuels businesses with the insight they need to identify issues and uncover actions. If you’re interested in learning how it can help your revenue grow, please reach out. I’d be happy to speak with you.


Why Complaints About Credit Scores Are So Complex

My son recently applied to rent an apartment, and when I became a guarantor on his lease, the landlord needed to run a credit check. Utilizing my banks’ tools, I saw that my credit scores were within two points of each other. Then, I received my score from the rental property agency — and I was surprised to find that it was 80 points lower.

Credit scores vary widely for a variety of reasons. Institutions use different scoring algorithms — and even different versions of the same scoring algorithm. Lenders have different schedules for reporting credit information to credit bureaus. Customers use their credit products daily in ways that impact their credit scores. Bureaus record the information in different ways and create different variables. Ultimately, these disparities have big impacts on individuals’ interest rates, interest terms, and the amount of credit lent.

To get to the bottom of my credit score disparity, I contacted the credit bureau that sent me my lowest score. Unfortunately, there was no option to speak to a representative.

Surprising Truths about Our Customers’ Complaints

With no one present to listen to customer voices, I decided to explore how customers are responding to credit score disparities using the PositivityTech intelligent platform. Here is an example of one customer’s complaint:

“I have been trying to repair my credit for the last year [because] I am trying to buy a home. However, the three credit bureaus have been reporting different credit scores… [one] seems like it takes 30 to 40 points off my score and drops it way back down… All my payments and credit cards are all paid up and I only get a 3 to 4 points increase. That’s just not right and I want this fixed.”

By assessing over one million complaints in the PositivityTech platform, we identified surprising findings about customer complaints related to credit score disparities that financial institutions are likely missing.

  1. The Inaccuracies of Off-the-Shelf Sentiment Scores

A widely used off-the-shelf sentiment score, which is not built on customer language about banking products, assigned a positive score to a complaint about credit score disparities and missed the customer’s discontent. In contrast, our proprietary Severity Score, which has a lexicon built on financial language, assigned a negative score to the same complaint — confirming what we intuitively know.

    • Off-the-Shelf Sentiment Score: +0.98
    • Proprietary Severity Score: -0.96
  1. Worse than Average Severity Scores

Customer complaints related to credit score disparities have a proprietary Severity Score that is 30% worse than the average complaint’s Severity Score.

  1. Duplicate Complaints

By using the PositivityTech platform, I quickly found that customers with disparate credit scores submit duplicate complaints — copying and pasting the same complaint to multiple financial institutions. This further emphasizes the severity of their complaints.

Flip the Script on Customer Complaints about Credit Scores

Fortunately, I was able to be a guarantor on my son’s lease, so my credit score disparity did not disrupt my son’s plans. Yet, credit score disparities do negatively impact individuals’ life decisions every day.

Ultimately, the issue of credit score disparities does not lie with one institution, and the solution is complex. By listening to their customers, financial institutions have the opportunity to flip the script on these and other customer complaints. Let us show you how.

Feel free to message me on LinkedIn. I look forward to speaking with you.


Uncovering Value in Customer Complaints About Overdraft Fees

A friend’s daughter was recently purchasing groceries when her debit card was declined. Embarrassed, she stepped out of the line to check her bank balance on her phone. As it turned out, she had an overdraft of $200 — and a $35 overdraft fee on top of that. In a linked savings account, she had more than enough money to pay for the groceries. But, it was too late. She hadn’t transferred the money over in time.

The overdraft fees that affect so many of us have become a hot topic of conversation, and this summer, the Consumer Financial Protection Bureau (CFPB) is reviewing the 10-year-old rule that sets limits on banks’ overdraft fees. This rule, which was adopted in the aftermath of the 2008 Financial Crisis, mandates that financial institutions issuing debit or credit cards must get customers’ permission before enrolling them in overdraft protection programs.

  • In 2018, bank customers paid a total of $11 billion in overdraft fees to US banks.
  • Today, bank customers incur an average of $35 in charges each time their accounts overdraft.

While the complaint issue categorized as “overdrafts and fees” is only a fraction (less than 5 bps) of all complaints submitted to the CFPB since 2011, companies’ responses to their customers drive much dissatisfaction. In fact, even when a customer is refunded for an overdraft charge, the customer may still have a negative perception of the bank.

With the PositivityTech platform, my team assessed over one million customer complaints in the CFPB database and homed in on customer complaints related to overdraft fees. By holistically studying this dataset and listening to customers’ voices, we identified findings that make it possible to predict future overdraft fee issues and define preventive actions that can impact customer satisfaction, regulatory relationships, and financial performance.

Listening to Our Customers’ Complaints About Overdraft Fees

First, let’s explore three real-life examples of customers’ complaints about overdraft fees:

When I opened my savings and checking accounts, I specifically requested [the bank] to not allow overdrafts in my accounts… Selecting this option gave me peace of mind since I knew that if I wanted to pay for something but I didn’t have enough money, [the bank] would just decline the transaction and I would know I was running low on my balance. [But] some payments using my savings account were not only not declined, but a ridiculous number of overdraft fees were charged to my account. I did not notice anything because I didn’t receive any text message or email alerting me of the situation. 

[My bank] charged a service fee and overdrafted my account twice. I’ve tried calling, chat (waited 20 min)… I thought that I was going to get that service fee waived because I had the requirements within the dates of the same billing cycle. 

I knew that I had some significant charges that were going to hit my account, so I transferred $3,000 from my savings account to my checking account… However, the bank still hit me with an overdraft fee… Even though [the representative] stated that the $3,000 was transferred to my account, it was not credited to my account [in time]. [The bank} always holds the funds for a day before crediting them to my account, which seems unethical and illegal.

Understanding the Urgency in Our Customers’ Complaints

Next, we explored the PositivityTech platform’s proprietary Severity Score, an algorithm designed to shed light on the business urgency of a customer complaint and a leading indicator of future adverse actions. We found that customer frustrations related to overdraft fees:

  • Are 24% worse than that of the average complaint.
  • Are the worst when a customer is closing on a mortgage.
  • Have the highest volume when customers’ funds are low.

Challenging Banks’ Assumptions

While many may assume that customers who overdraft are high risk, their narratives and reasons for overdraft show that they are actually a mixture of high- and low-risk customers. By utilizing the PositivityTech platform, we found that customers who share complaints about overdraft fees are:

  • Almost 20% less likely to close their accounts due to delinquency.
  • Over 40% less likely to fall into debt collection as compared to all complaints.
  • 5% more likely to close their accounts.

Responding to all overdraft customers in the same way will drive non-delinquent and revenue-generating customers to look for alternative resolutions.

Responding in a Multifaceted Way

Interestingly, financial institutions responded to many customers who complained about overdraft fees by providing monetary relief, acknowledging the challenges they face in the execution of regulations.

  • 45% of overdraft fee-related complaints result in monetary relief to the customer.
  • 9% of all CFPB customer complaints overall result in monetary relief to the customer.

Yet, providing compensation to address these issues is not a unilateral strategy that will improve customer satisfaction. Additionally, without improved targeting, monetary relief can be costly and ineffective. With customer complaints about overdraft fees increasing over time, anticipating and avoiding overdraft complaints is critical.

During the last 12 months:

  • The average monthly volume of customer complaints about overdraft fees has increased by 300%.
  • The average monthly volume of overdraft fee complaints resolved with monetary relief has increased by almost 3x.

With the PositivityTech platform, we have been able to understand customers’ behaviors by listening to their voices. Deeply understanding what our customers are saying drives predictive capabilities, which benefit all business functions; preventive actions that can address customer satisfaction; and regulatory and financial opportunities.

My team and I are ready to meet with you to share more of our findings about the hidden value in customer complaints.

The PositivityTech platform integrates with existing systems so that you can easily bring our platform to your organization. Learn more about it here.


Behind the Scenes of the PositivityTech® Intelligent Platform with Marcia Tal

Throughout my career, I’ve felt privileged to help multiple lines of business profit from the hidden value in their data. While companies approach many types of data as strategic assets, they consistently overlook customer complaint data. Together with my team, I am leveraging my deep experience with customer listening and shedding light on the hidden value of customer complaints.

This week, Tal Solutions announced the launch of the PositivityTech intelligent platform, a new platform that uncovers and enables the strategic growth opportunities hidden in customer complaints. In this interview, I share the pain point that the PositivityTech platform solves and how financial institutions can approach their customer data in strategic ways, particularly to create new revenue.

What problem does the PositivityTech platform solve?

Today, many businesses approach their customer complaints in a very transactional manner. They focus on satisfying customers’ immediate needs and meeting the requirements set by regulatory bodies. But most companies do not approach complaints as strategic assets. As a result, they miss systemic patterns that manifest in complaints. They miss issues that lead to negative headlines or regulatory risks. They miss opportunities to improve and strengthen their businesses, especially as they seek much-needed revenue growth.

We believe that customer complaints can be a critical part of a business’s success, and that negative input can have a positive impact. With PositivityTech’s predictive platform, which combines human insights with advanced technology, companies can foresee future complaints and their causes, quickly and proactively address customer feedback, protect their business, and improve performance.

How has your background led you to this new venture?

I have always been passionate about voice of customer data. There is a wealth of information that can be unpacked from customers’ feedback, word choice, and tone of voice. To really know how its business is doing, a company needs to get as close as possible to its customers and become open to hearing – and understanding – its customers’ complaints.

My background is in consumer banking, and I spent my career immersed in the intersection of customer data and advanced analytic disciplines. As Citigroup’s former EVP of Decision Management, I built and ran a global function bringing advanced analytic capabilities and processes to 30 markets. Before that, I implemented customer segmentations, product offerings, marketing campaigns, action-oriented analyses, and risk management policies and tools, all supported by operational innovations. I also audited businesses, met with regulators on a regular basis, and saw the underlying issues that franchises face. Over the course of my career, I have seen the challenges that companies can experience when they are not listening to their customers, and have worked diligently to advance these capabilities.

Now that companies have better access to very large and unstructured data sets of their own customers’ voices, they have the opportunity to hone in on customer complaint data in new ways. With advanced technology to reveal unexpected opportunities, companies can take actions to proactively strengthen their businesses and keep them ahead of the competition. I look forward to helping companies use their data to reframe their customer complaints as strategic and predictive insights, which can continually reveal opportunities for action and growth.

How can your approach to customer complaints proactively strengthen your business?

Strengthening your business often entails preparing for what’s ahead and understanding industry and market trends. When a company can identify and understand the specific problems described in its customer complaints as compared to its competitors’, it can predict future risks and reveal unexpected opportunities that keep it ahead of its competition. Complaints are everyone’s challenge, and strategic growth is everyone’s opportunity.

What can financial institutions do to make better use of their customer data?

Start approaching complaints as strategic intelligence, instead of individual issues that need to be resolved. Consider where complaints may highlight risks and how their language can be used to predict future issues, too.

Identify the severity of complaints, based on a customer’s word choice, tone of voice, or duplicate complaints. Flagging higher-risk customers will help you prioritize where action will matter the most. Understand the environmental risks that come from unresolved complaints – including public relations risks, lawsuits, and enforcement actions. Know that when complaints aren’t resolved, customers do not stop complaining. They may continue to complain to your institution – or they may approach other sources that are beyond your control.

How do you interact with your customer complaints today? I’d love to hear your techniques and help you unpack those complaints in valuable new ways that increase your bottom line. Please feel free to get in touch.


How Complaints Can Drive Business

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.