A Trigger That Uncovers The Competition You Never Considered

Complaints about money transfers are on the rise. The PositivityTechⓇ platform’s proprietary trigger process alerts our clients of the growing industry triggers derived from customers’ “voices” and provides a market comparison of the issues triggered.

This month, the problem of adding money during a money transfer was one of the top issues triggered, and the market comparison of this issue identified that only one traditional bank, “Bank A,” is facing this challenge. Other complaints about this issue came from customers of recently launched fintech companies, which we’ll call “Digital Payment Companies.”

Identify your growing problem and competition

Customer complaints about the inability to add money during the transfer process are still relatively small in volume, increasing as digital money transfers become more mainstream.

  • 81% of all complaints about money transfer issues come from Bank A.
  • 14% of all complaints about money transfer issues come from Digital Payment Companies.

The following complaint comes from a Bank A customer:

“My monthly statement came in and I was told that I could connect my [Bank A] account to my X to make a payment for my credit card balance. When I went to add my [Bank A] to my X online payments, it stated that [Bank A] has made a change that prevents you from being able to link your accounts.”

The following is a complaint about this issue from a Digital Payment Company customer:

“Adding money to my verified [Digital Payment Company] account in good standing from a confirmed and active previously used bank account is being blocked without explanation and without reason. I tried numerous times with the same error message.”

Both customer complaints, while originating from very different organizations, reveal a similar industry issue: Customers are unable to complete their digital payments. Perhaps there have been recent bank policy changes related to linking accounts? Complaints highlight the downstream effects of policy changes, which are often not considered.

Understand your competition

By exploring customer complaints about issues surrounding money transfers in retail banking, you will be able to uncover alternate competitors – competitors you may not be considering. From an “outside in” perspective, understanding your multiple and varying competitors provides actionable intelligence that makes it possible to answer the following questions:

  • How do your complaints compare?
  • Who is in your complaint peer group?
  • What policies or processes need to be addressed?
  • What actions should you take?

Predict your financial institution’s challenges

The PositivityTech platform’s proprietary trigger process can also help predict whether money transfers may become an issue for other financial institutions as well. In addition to analyzing how Bank A’s extreme share of complaints compares to other institutions, you can also compare the following per institution:

  • Severity of complaints
  • Identification of bias within complaints
  • Geographic breakdown of complaints
  • Product breakdown of complaints
  • Issue breakdown of complaints
  • Complaint narratives

With this information, financial institutions can analyze the root cause of complaints, find leading indicators of complaints, and predict up-and-coming competitors, as well as the issues that your institution may face.

Prevent challenges

With our proprietary trigger process, financial institutions can be alerted to new and recently changing issues, even when small in volume, and gain a competitive advantage. As the analytic process unfolds, financial institutions can adopt actions to inhibit future complaints. If you’re interested in uncovering the issues and competition your institution may never have considered, please reach out to me at marcia.tal@positivitytech.com. I look forward to hearing from you.

Answering The Need For Better Complaint Categorization

We’ve all experienced this: we call our bank with an issue that needs to be addressed, and we’re transferred from one department to the next. With each transfer, we become more frustrated. We may lose trust in our banks, complain to regulatory bodies, and close our accounts. With the PositivityTech proprietary Categorization solution, we make it possible for banks to recognize and solve customers’ issues.

The issue is never the issue

In our conversations with financial institution executives, they, too, share their frustration about categorizing customer complaints and addressing root causes. These are the pain points:

  1. Customers are prompted to select a single category that summarizes their issue — whether or not that category specifically captures their problem.
  2. As a result, many banks are forced to manually switch their customers’ categories.
  3. This creates an inefficient process and inconsistent categorizations.
  4. Problems ensue with customers, who are frustrated, and regulators, who seek accuracy, fairness, and consistency.

Uncovering the real issue and finding the right solution

The PositivityTech platform’s Categorization solution bridges the gap between the issues that customers select and what they actually say. By analyzing more than one million complaints and applying advanced analytic techniques, we developed the Categorization solution to extract the multiple issues nested within a single complaint. For example, the excerpt of the complaint below addresses multiple issues aside from the category the individual chose:

Category chosen: “Trouble during payment process”

Please find my complaint against X Loan Servicing for fraud; theft of the loan; identity theft; conspiracy to defraud; violation of TILA, RESPA, UCC, and RICO Act; and other misconduct.

As you can see, the complaint would need to be manually rerouted from the payment processing unit, based on the category the individual chose, to the fraud resolution unit.

In our analysis, we found the more categories a complaint triggers, the higher the customer’s Severity Score, a proprietary score that identifies severe complaints and future risk based on customer narratives.

  • Complaints that trigger more than one category make up 91% of all complaints.
  • Complaints that trigger exactly one category reveal a Severity Score that is 60% better than the average Severity Score.
  • Complaints that trigger more than one category reveal a Severity Score that is 5% worse than the average Severity Score.

A digital transformation that meets our customers’ needs

With our Categorization solution, we have created a consistent and multifaceted grouping of customer complaints that provides insights to identify relevant resolutions across all customer touchpoints, from digital to in-person.

With digital banking here to stay, banks are under pressure to make their digital operations smarter — and to find ways to accurately solve their customers’ issues. With the Categorization solution, we have made it possible for banks to pinpoint the right solutions for their customers, which is a win-win for customers and banks.

If you’re interested in exploring how our Categorization solution can help your financial institution effectively solve your customers’ issues, I’d be happy to analyze a number of complaints with you. Please connect with me at marcia.tal@positivitytech.com. I look forward to speaking with you.

Three Months Later: The Growing Impact Of COVID-19 On Banks And Customers

The emergence of the coronavirus health crisis has negatively impacted financial institutions’ ability to help their customers. Consumers are beginning to complain loudly and are not afraid to publicly air their complaints.

Using the PositivityTech intelligent platform, we explored Consumer Financial Protection Bureau (CFPB) complaints submitted since March 10th and found that approximately 7% of complaints are COVID-19 related. While small in number, the issues featured in their complaints are distinct from non-COVID-19 related complaints, and will continue to grow.

The CFPB’s COVID-19-related complaints are gaining attention because they highlight critical issues in our financial institutions, as seen in this recent Consumer Reports letter to Citi about their rise in customer complaints. Systemic issues that are cause for concern — and plague many banks — include:

More people are submitting narrative complaints

While personally identifiable information is masked by the CFPB, customers typically do not agree to have their complaints publicized. However, the number of published narratives has more than doubled since March 10th, revealing a behavioral shift. People are more frustrated and are now actively sharing their complaints.

  • 12% of complaints included written narratives before the pandemic.
  • 31% of complaints included written narratives since the pandemic began.

COVID-19 related complaints are different from those that are not related to the pandemic

Utilizing our proprietary analytic methodologies with the PositivityTech platform, we explored COVID-19-related complaints and compared them to non-COVID-19-related complaints, and found that the top 10 complaints for each group were very different.

  • While 70% of complaints share issues with credit bureau reporting, customers impacted by the pandemic are struggling to make payments — particularly their mortgage payments, which represent half of those complaints.

Negative interactions with financial institutions

While customers have continued to exhibit trust in their banks, turning to them for support in times of crisis, their takeaways have been disappointing.

1. Banks do not appear to have contingency plans in place

Like many of our institutions, financial institutions are overwhelmed. During the pandemic, they are managing deferred loan repayments, the allocation of Paycheck Protection Program loans, and the pandemic’s financial impact on customers. Meanwhile, customers have complained about banks’ lack of preparedness, sharing that their banks were not ready to meet a global crisis. One customer complaint captures this prevalent feeling:

I have contacted X in regards to applying for a two interest payment adjustment and for a deferment on the monthly payments. An associate advised that the bank has no plan in place. I live in the state of New York and we are deeply affected by COVID-19. This is unacceptable and X should have a contingent plan in place for such a catastrophe.

2. Approved payment deferrals that are not being recognized by credit bureaus will lead to greater problems

Even when a financial institution agrees to a delayed payment, customers complain that their credit reports are adversely affected, resulting in delinquencies and/or lower credit scores. These issues can drive negative scrutiny.

  • 20% of complaints about incorrect information came from COVID-19-related complaints that revealed:
    • A drop in their credit score even after requesting forbearance
    • Negative remarks on their credit reports

One customer shared:

Due to the COVID-19 pandemic, I was adversely affected financially and contacted X, who agreed to a 3-month deferral of payments and would not report that my account was delinquent or charge a late fee. Notwithstanding the agreement, X reported to all credit bureau agencies that my account was in violation of the agreement.

3. Dynamic state policies drive cancellations and refund issues

New laws and guidance that are created “on the fly” differ by state, resulting in customer frustrations about refunds. These types of transactions are expected to increase as each state deals with its infection rates separately.

I used my X credit card to purchase two tickets to a concert. The concert was cancelled due to COVID-19. X said that the concert is not cancelled, but postponed so they won’t refund the ticket plus fees. I contested the charges posted on my statement due to “service not rendered.” I received a letter from the bank denying the reversal of charges, stating that they are not responsible for misrepresentation of merchants who I chose to do business with. Is this not the definition of “service not rendered”? The bank says, “This is not a bank issue.”

4. Customers believe financial institutions are using predatory lending practices

COVID-19-related customer complaints share perceptions that banks are taking advantage of customers — and these complaints may eventually find their way to regulating bodies. One customer wrote:

I contacted the company stating that I’ve been laid off because of the pandemic. I’m having a hard time paying any bill. They reported negative remarks on the credit report. I told them that payments cannot be made if income is not coming in until the pandemic is over. They stated whatever money to send in with a high interest rate on a daily basis. At this rate, I’ll owe 3x the amount on loan. [This is] predatory lending.

5. Those who are ill believe they are victims of bias

Customers state that some financial institutions use screening procedures to keep track of consumer expenses and then suspend their services illegally. In order to avoid this misrepresentation, banks must practice greater transparency and improve their communications about their risk mitigation strategy. These types of complaints are high-risk and can result in negative attention. Here is one such complaint:

At the beginning of COVID-19, I received an email from X, simply stating that they closed my credit card account. I wrote to them saying that I did not want my account closed, that I had guarded that credit card carefully and kept it only for emergencies… I had no balance on that card… Now I do not have that safety net… My credit score at the time was approximately 800. There was absolutely no justification or cause. They apparently profiled me and somehow learned I was sick… which is in violation of some disabilities law.

With the PositivityTech platform, we are able to identify, understand, and predict systemic issues that financial institutions are facing during this global crisis, and create strategies to prevent these issues in the future. If you are interested in exploring the pandemic’s impact on your financial institution’s customers, please contact me at marcia.tal@positivitytech.com.

Negative input can have a positive impact, and ultimately, strengthen our institutions.

Taking a Stand Against Bias

Systemic discrimination is part of U.S. history, and we continue to be plagued by it. These biases drive income disparities and limit wealth creation. Today, individuals are speaking out about their experiences with racism and discrimination, and they are asking organizations to make systemic changes that combat bias. The call to act is loud and clear. Now is the time to root out bias, empower people through their voices, and transform negatives into positives.

Recently, we announced the PositivityTech intelligent platform’s Bias Index: an AI predictive model that identifies prejudice within customer and employee complaints and makes it possible for financial institutions to repair products or unjust practices. Using the PositivityTech platform’s Bias Index, we found that:

  • Products like mortgage and auto loans are four times more likely to have biased practices, which may be attributed to these transactions being done “face-to-face.”

In fact, a recent New York Times article reveals how bias has excluded black families in Minneapolis from buying homes, and therefore, building wealth, sharing: “More recently, banks have been more likely to turn down black loan applicants… even after controlling for income and credit risk.”

  • Alternatively, complaints about products with low face-to-face interactions, like virtual currency, debt collection, and credit reporting show much lower bias scores.

When there are face-to-face interactions, people may be more likely to bring biases into their decisions — whether they do so consciously or unconsciously.

As tensions due to social inequities boil over, the PositivityTech platform can help financial institutions turn their customer voices into intelligence and proactively weed out systemic discrimination. We believe that negative input can have a positive impact, and that together, we can flip the script on complaints and help institutions provide equal treatment to all customers irrespective of race, age, religion, gender, sexual orientation, military service, or citizenship.

If you are interested in taking a stand against bias, please get in touch with me at marcia.tal@positivitytech.com.

Announcing The Bias Index: Identifying Discrimination In Your Institution

In banking, bias reveals itself in subtle ways. Customers may experience an obstacle and find that discrimination is at the root of their challenge. They may face discrimination due to their race, age, religion, gender, sexual orientation, military service, or citizenship.

I am proud to present the PositivityTech intelligent platform’s proprietary Bias Index, a new tool that identifies prejudice within customer and employee complaints and makes it possible to respond to systemic discrimination.

Why did you decide to develop the Bias Index?

Each one of us has faced unequal treatment at some point in our lives, and it is wrong that discrimination continues to play a role in our banking. For example, in December, the media revealed that a black customer and a black employee at JPMorgan Chase were unable to gain access to the same opportunities as their white peers. As a result, the bank implemented mandatory diversity training and said that it “would pay more attention to employee complaints.” Today, the pandemic continues to highlight issues of discriminatory banking practices against minority business owners. While banks are doing their best to weed out discrimination, it continues to rear its ugly head.

Customers tell us what we need to know, but often indirectly. I created the Bias Index because I understand the value of customer voice data, I have expertise in the advanced analytics capabilities needed to extract this intelligence, and I am passionate about eliminating bias from our institutions. Bias is wrong and there is no place for it in our institutions’ decision-making processes.

Financial institutions need to address issues of bias in order to enforce fair banking practices, establish safe and sound lending practices, ensure compliance, and prevent lawsuits.

How does the Bias Index pinpoint discrimination?

The Bias Index is an AI predictive model that digests the contextual reference of a complaint to reveal the root of the complaint, allowing financial institutions to focus on repairing products or unjust practices.

Using the PositivityTech platform, financial institutions can uncover customer complaints that shed light on disparate treatment and their impact. Here are two examples of such complaints:

“I received a call from an unknown collection agency stating they were a collector for X… The representative on the phone had a very intimidating and condescending tone and threatened to garnish my wages if I did not make a payment that moment… My recent knowledge of X’s class action lawsuit gave me the courage to speak up about the injustice I faced as a military service member. I believe I was subjected to illegal collection practices from X’s use of administrative offset — a procedure whereby federal payments, such as social security, veterans’ benefits, and tax refunds are withheld to collect debt.”

“The employees refused to be sensitive to my pronouns’ and name change. As a result, my account was closed after years of torture from this credit card company. I’m still left with a punishment and a persistent reminder.”

With a well-designed and implemented program of self-testing, financial institutions can safeguard their customers. Yet, to truly prevent discrimination, banks need to do more than self-testing. With its proprietary tools, including the newly developed Bias Index, the PositivityTech platform pinpoints the root cause based on customers’ voices, predicts future unfair actions to ensure better decision-making, takes steps to prevent systemic discrimination, and proactively strengthens your institution.

Why is it normally so challenging for institutions to identify biases and systemic discrimination?

Interestingly, less than .02% of CFPB complaints identify discrimination as the reason for their complaint. Context matters. Subtle bias may be described in the financial institution’s action, or the interaction with the financial institution’s employee.

Furthermore, while the PositivityTech platform’s proprietary Severity Score captures the overall frustration within customer complaints, subtle bias is a sub-specialization. Complaints that contain words like “decency” and “bias” are 30-40% more severe than the average complaint. However, many of these complaints are not due to some type of prejudice.

With the PositivityTech platform’s Bias Index, we are activating the science of transforming negatives to positives in timely and impactful ways. If you are interested in learning more about how the Bias Index can help you identify and weed out systemic discrimination in your financial institution, please get in touch with me at marcia.tal@positivitytech.com. I look forward to hearing from you.