Steven J. Ramirez Jul 10, 2013

Leveraging CFPB Complaint Data

The Consumer Financial Protection Bureau (CFPB) has made public more than 100,000 negative reports made by customers against the banks that serve them. While masking the identity of the consumers, the complaint database does name the approximately 450 companies involved. This would have been challenging enough for the industry from an image perspective, but the CFPB has gone a step further and provided a free application to make it easier for anyone to analyze and disseminate the results.

While the ultimate impact the CFPB’s consumer complaint data will have on the banking business is not yet clear, reputation risk is certainly heightened. There is also increased regulatory risk, as the CFPB is using customer complaints to guide its enforcement activities. Fortunately, there is a silver lining for banks that take the initiative to use this data to focus on improving the customer experience.

The CFPB database gives banks something they have not had in the past: an industry benchmark and points of comparison across products, lines of business and geographies. When leveraged to the fullest extent, this database can be a source of significant competitive advantage. All it takes to realize these benefits is careful analysis of the CFPB’s data and a strategy for making customer-focused improvements.

Given its zeal for publicizing consumer complaints, it’s easy to see why many banking executives view the CFPB as an adversarial regulator. Many executives working in the consumer credit card business felt the same when the agency began levying fines on companies last year. In 2012, Capital One, Discover and American Express collectively paid more than $500 million in fines and refunds levied by the agency.

On the other hand, the CFPB complaint database does enable banks to zero in on and prioritize problems and alerts executives to issues experienced by competitors. Here are five best practices for managing those consumer complaints:

Take a holistic perspective to solving customer experience problems. Start by “journey mapping” to gain a complete picture of the customer experience across all company interactions. As process and policy changes are made, make sure these efforts align with key business objectives. To accomplish this, listen and learn before taking action. This ensures that the changes being made really matter to the customer and enables the bank to prioritize improvements that will create the biggest wins first.

By monitoring social networks, bankers can learn what their customers really think about their products and the institution, which helps better define how to deliver experiences that create value and delight. And foster a company culture within the institution that places the customer at the center of every action. The customer journey is not simply about meeting needs; it’s about creating feel-good experiences that people want to repeat and recommend. To ensure employees help make that happen, develop initiatives that build buy-in across the organization and encourage everyone to play a part in optimizing the customer experience.

Finally, define metrics early on that align with key business objectives and customer experience goals. After corrective measures have been implemented, measure the impact. Keep refining the customer experience to meet evolving needs, and continue to measure the impact of the changes.

By approaching the CFPB’s complaint database as a new source of critical performance information – both for their own institution and for competitors – bankers can take actions that will simultaneously mitigate risks and strengthen the institution.

Mr. Ramirez is CEO of Berkeley, Calif.-based Beyond the Arc, Inc., a customer experience and advanced analytics firm helping financial services clients identify opportunities to differentiate themselves in the marketplace. He can be reached  

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