How Complaint Handling Can Benefit Your Firm

      Regulated firms can leverage complaint handling as a powerful tool. By addressing client concerns promptly and fairly, they not only build trust and loyalty but also gain valuable insights to improve their offerings. This translates to a stronger reputation, reduced costs from client churn, and empowered employees who can effectively resolve issues, ultimately propelling firms towards long-term success.

      DFSA Complaint Handling Thematic Review

      Complaints handling has been one of the key topics on the Dubai Financial Service Authority’s (‘DFSA’) radar. On 28 August 2023, the DFSA released a ‘Dear SEO Letter’ entitled “Complaints Handling Thematic Review 2023”. The review was conducted in two phases. The first phase consisted of a survey sent to all Authorised Firms which provided an overview of their complaints handling arrangements, policies and procedures, and systems and controls. The second phase has yet to be conducted and will consist of on-site visits to a selected sample of Authorised firms where their complaints handling processes will be directly assessed.

      You can read the SEO Letter here.

      Following this Thematic Review, the DFSA expects Authorised Firms to use complaints as valuable management information to detect issues and trends through root cause analysis and utilise this information to continuously improve their services and products for their respective clients.

      What Constitutes a Complaint?

      Under free-zone rules, the definition of a complaint is “any oral or written expression of dissatisfaction from a client”, in relation to the provision of a financial service. The full definition differs slightly between the free-zones, and firms should review the definition within the applicable rulebooks.

      Clients may make a complaint by email, letter, in person or over the phone. It is expected that firms accept complaints in all forms.

      It is imperative that employees are trained to recognise what is meant by ‘dissatisfaction’. The client does not and should not necessarily need to state that they “wish to make a complaint” for an employee to take their dissatisfaction seriously.

      Essential Systems and Controls

      Firms are advised to:

      • Have comprehensive written policies and procedures for handling complaints.

      Having in place the appropriate processes and procedures to identify complaints is fundamental to ensuring that clients are treated fairly, and all regulations are adhered to. First and foremost, the procedures should allow the firm to effectively handle the complaint in the timeframes set by the regulator. For example, once a complaint has been received, firms should take no longer than seven days to acknowledge the complaint.

      Moreover, firms should also consider how complaint handling will differ based on client classification as the rules for retail and professional clients differ.

      • Management Information (“MI”)

      The governing body or board of directors should be informed of all complaints. Information such as open and closed complaints, the timeframe for resolving complaints, and the resolved outcomes are very useful tools for MI. It allows the governing body to analyse the data and make changes to improve the service.

      • Employee training

      It is vital that customer-facing employees receive training regarding complaint handling. They should receive training at the induction stage, on a periodic basis, and  in relation to any material updates. It is imperative that employees understand what questions they need to ask the client, how to be sympathetic to the client’s complaint and how to escalate the complaint when needed.

      • Disclosure of complaints handling procedures

      Client agreements must contain the key particulars of the firm’s complaints handling procedures. Clients should also be made aware that they can obtain a free copy of the procedures upon request. Clients appreciate knowing they are protected and that there is a system in place when matters go wrong.

      • Recording complaints

      Firms should accurately record all complaints made against them in relation to any financial service provided to a client. It is expected that the record contains details of the name of the complainant, the substance of the complaint, a record of the firm’s response, any other relevant correspondence or records, and the action taken by the firm to resolve each complaint.

      In some cases, if trends are not remedied, it may be appropriate for a firm to notify the regulator of any recurring or systemic problems identified.

      Client Complaint Best Practices

      • Proactive client engagement helps firms to understand any queries or concerns a client may have before it reaches the stage of submitting a complaint
      • Have an ‘open-door policy’ for employees to allow them to speak up when they believe something may have gone wrong or if they believe current processes are simply not working
      • Ensure there is adequate resourcing of employees and complaint handlers to allow the complaint to be handled effectively
      • Be open to receiving a complaint and be open to dealing with the complainant; understanding what would make the complainant satisfied early on in the process can make a big difference to the timeframe in closing the complaint.

      About Waystone

      Our Middle East Compliance Solutions team is well-positioned to support you in maintaining compliance with DFSA requirements on the topic of complaints handling. This may be providing you with the support that your in-house compliance resources require or alternatively providing education and training to your team on the regulatory requirements.

      If you have any questions or concerns on how this impacts your firm, please contact our Middle East Compliance Solutions team.

      Contact us

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