Complaints are an important indicator of how financial services firms are performing, and also how well regulation is working, but they are notoriously hard to interpret. From my time at the FSA and FCA, here are five things to bear in mind:
1. These figures are from the Ombudsman and so the complaints have already been through the firm's complaints' system and been turned down.
2. This means only complainants who are very determined will likely have persevered (though Claims Management Companies are also now a factor), and also that FOS uphold rates are especially significant.
3. PPI still dominates the figures, and may obscure complaints about other products that are starting to spike. Given the FCA campaign and deadline, this will be a feature for a while.
4. Absolute numbers of complaints are only a partial guide, and seeing these as a percentage of a firm's customers is at least as important.
5. There is a significant time lag built into these figures. They have been through both firm and FOS complaints' processes, so probably relate to experiences from 2016 or even before.
It's also true that complaints at firm level aren't necessarily all bad - making it easy to complain, and then dealing with them properly and quickly while learning lessons, can be a virtuous circle. But high levels of complaints to the Ombudsman, and high uphold rates once there, generally tell a negative story.
All this means that firms, regulators and commentators often still struggle to get to the real meaning of complaints data, beneath the obvious headlines. That said, they are a critical way into the customer's experience and, with careful analysis, can provide all sorts of evidence about what's working well and what isn't.
PPI complaints once again topped the table of consumer concerns, with a 14% rise in complaints to the Financial Ombudsman in the first half of the year, compared to the last six months of 2016.