By Nick Baldocchi on April 17th, 2013
 For over a year, the Consumer Financial Protection Bureau (CFPB) has been collecting complaint data across five different product areas in financial services including credit cards, mortgages, consumer and student loans, and banking and account servicing. The stated mission of the CFPB is to use this data to educate consumers about their financial providers. With over 92,000 complaints in the database, it’s now time to see if there has been any noticeable change in two key customer experience areas.
Company responses disputed by customers
For every complaint in its database, the CFPB is tracking whether the customer accepted or disputed the company’s response. For the past year and a half, the CFPB has seen a steady and dramatic decrease in customer disputed responses from 23% in December 2011 to 10% in March 2013 (as shown in the graph below). This decrease includes complaints for all five product areas.
Untimely company responses
The CFPB is also tracking complaint response time – that’s the time from when a complaint is submitted to when the company responds. An “untimely response” takes more than 60 days. Again, for the past year and a half since the database became available, we see a significant decline in untimely responses from 10% in December 2011 to just 1% in March 2013 across all five product categories.
Key Takeaway
Although the available data cannot verify whether the CFPB is making a difference in the financial services industry, the data suggests that customer experience is improving. Because we’re seeing a steep drop in both the volume of consumer rebuttals and the time between complaint submission and accepted resolution, it appears that banks are responding more quickly and effectively to resolve customer complaints. As the CFPB complaint database continues to expand over time, we will find be more opportunities to look for noticeable changes in customer experience.
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By Nick Baldocchi on April 10th, 2013
 Back in early July 2012, the Consumer Financial Protection Bureau (CFPB) made public their complaint database consisting of over 14,000 consumer credit card complaints. Since then, Beyond the Arc has analyzed the data in depth,providing actionable insights into the current credit card market. As of March 28, 2013 the CFPB has expanded the database to include complaints about mortgages, student loans, consumer loans and bank accounts and servicing encompassing over 92,000 customer complaints.
- Mortgage – complaints about loan modifications, payments, collection, servicing and foreclosure
- Credit card – a wide range of complaints, the top three being billing disputes, interest rates, and identity theft
- Bank account or service – complaints about account management, deposits and withdrawals, making/receiving payments, and ATM cards
- Student loan – complaints centered on repaying loans, inability to pay, and loan acquisition
- Consumer loan – complaints on loan and line of credit management, inability to pay, and account terms
With this newly expanded database, financial services companies can now gain insights into a wide range of products to help guide the customer experience and be one step ahead of the competition. At Beyond the Arc, we’ll continue our analysis of the CFPB database to bring you new understandings of what customers are complaining about and how this could affect the future of banking products.
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By Brandon Purcell on March 19th, 2013
Co-author: Nick Baldocchi
Of all the lessons learned from the Consumer Financial Protection Bureau’s (CFPB) enforcement actions in 2012, one is key: effective complaint management is vital to a company’s regulatory health. However, companies don’t need to wait for negative experiences to escalate into complaints customers file with regulators. In fact, there is a silver lining that comes from closely analyzing and tracking complaint data. Banks and credit unions can identify customer issues early on, and take action to improve customer experience.
As you’ll see in the graph below, the penalties imposed on American Express, Capital One, and Discover last year coincided with spikes in complaints to the CFPB:
The real threat of increased regulation and enforcement from the CFPB and other agencies has financial institutions asking:
How can we identify and address customer issues before they become complaints, or worse, regulatory risks?
The key lies in understanding how a customer problem becomes a complaint, and stopping it from growing further. In the chart below, we illustrate the lifecycle: first the customer experiences a problem with their bank and provides feedback. One possible outcome is that the bank addresses the problem and resolves it. However, often the bank does not address the issue, and the customer tries multiple times to get it resolved. As they grow more frustrated, the customer may file a complaint with the CFPB or even close their account.
How can we resolve issues before they escalate to complaints or attrition?
Increasing retention with your Voice of the Customer program
To prevent customer concerns from escalating into costly problems, Voice of the Customer (VOC) analytics can be a powerful resource.
An effective Voice of the Customer program gathers feedback from a variety of sources, and uses text analytics to turn unstructured text into structured data. This enables you to identify and quantify the issues your customers are talking about.
It’s important to focus on sources that can provide actionable insights to help you improve the customer experience, for example:
- Internal data – customer feedback, call transcripts, in-store customer service notes, and even open-ended survey questions (which are often overlooked and can be quite valuable).
- Social media data – provides a view of what your customers are saying on public forums.
- Regulatory data –the CFPB consumer complaint database shows you the issues your customers felt they needed to escalate, and may signal regulatory risk.
By using all of these different types of data for analysis, you can determine the top issues and emerging trends that are fueling complaints. This is a first step in investigating root causes and drivers of attrition.
A brief case study
Using the CFPB’s consumer complaint database, Beyond the Arc tracked the issues logged for multiple financial institutions throughout 2012. For instance, the graph below shows the number of interest rate complaints about Citibank submitted to the CFPB. Notice how the volume of complaints increased from March 2012 until it peaked in June 2012.
Although the first graph enables us to see the trend in interest rate complaints, when combined with Beyond the Arc’s Social Customer Insights service, we gain insight into early warning signs of potential risk. Our Social Customer Insights database contains over 336 million social media posts about the top 100 banks and credit unions collected over the past 18 months. The second graph shows that comments about Citibank’s Annual Percentage Rate(APR) really spiked in May 2012 –right before the bank had its largest number of interest rate complaints in the CFPB database. That indicates people were already venting on social media about this issue.
Here’s an example of one customer complaining about their Citibank APR on social media:
“How’s this for cynical capitalism. Rang up Citibank to pay-off and close my credit card. The lovely lady in the Phillipines asked me why and I said: your interest rate is far too High (21%) and she said Well I’m now willing to lower your rate because you are such a valuable customer …..Well if that’s the case, why didn’t you drop it earlier?”
The ROI of improved customer experience
Making improvements in customer experience can have a positive impact on your company’s bottom line. Industry analysts have argued that credit card issuers may be leaving $250-$300 million on the table—annually. They arrive at their estimates by totaling the lost opportunities from attrition and churn, incremental purchases, and word-of-mouth referrals. Tracking complaints and Voice of the Customer initiatives do have hard costs, but there are quantifiable revenue opportunities to offset them.
Listening to the Voice of the Customer –across many channels– is essential if you want to detect problems before they become serious complaints that could cost your business millions in fines or lost customers. To increase your potential for success and improve the ROI of your VOC efforts, it’s important to have a clear strategy and well-defined metrics, both aligned with your key business objectives. Start with the data at hand, and gradually add new sources to enhance your picture of the customer experience. Most importantly, have a mechanism in place for taking action to resolve pain points and improve customer experience – to ensure your company’s name doesn’t end up in a headline with the CFPB.
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By Gavin James on March 18th, 2013
 Billing disputes are the number one reason for credit card customer complaints, and . Not only does this put credit card providers at risk of losing business, it may cost them plenty if the Consumer Financial Protection Bureau (CFPB) detects any regulatory or compliance issues. Just ask Capitol One, Discover, and American Express who received multi-million dollar fines from the CFPB. The good news, however, is that banks and credit unions can leverage the CFPB customer complaint database to identify pain points early on and take action to retain customers, increase satisfaction, and avoid costly mistakes.
Beyond the Arc’s ongoing analysis of the publicly available CFPB customer complaint database enables us to track the top issues, which banks receive the most complaints, and how issues are trending over time. Keeping a close watch on this data can help financial institutions identify and resolve customer pain points to increase retention, while reducing servicing costs and regulatory risk.
Free On-demand Webinar:
Leveraging CFPB Complaint Database Analysis to Improve Customer Experience
Beyond the Arc has been analyzing the CFPB complaint database since it was made public in July 2012, and over time we’ve been tracking the top issues and the top financial institutions receiving complaints.
Our free webinar highlights how data analytics can identify key issues early on and uncover emerging trends to help banks and credit unions reduce compliance risk, enhance Voice of the Customer efforts, and improve customer experience.
 
By Gavin James on March 14th, 2013
Co-author: Steven J. Ramirez
In the age of Dodd-Frank, mortgage lenders are waking up to a new reality: customer experience isn’t just about practical service and compliance issues. An exceptional customer experience can mean the difference between winning and losing business altogether. Referrals are no longer driven by the real estate or financial world –consumers have stepped up to own the decision, thanks to the increasing influence of social media. As this trend accelerates, financial institutions will need to keep pace with consumer expectations if they want to gain competitive edge.
For the first time in history, consumers have the opportunity to publicly share their experiences with any business, with a broad network of friends and colleagues. New York public relations firm Edelman reported that, in the online world, 76% of consumers will recommend companies they trust to a friend. And 57% of shoppers are more likely to buy after receiving opinions from friends, according to a recent Social Impact Consumer Study from Sociable Labs.
What we’re talking about here is trust – which means mortgage lenders have a big job ahead of them. Even before the economic crisis rocked consumer confidence in financial services, people turned to their friends for advice to find the best TV, cell phone, etc. Now home loan borrowers often seek referrals from their social network before they’ll consider talking with a lender. Thus, if lenders want to gain a marketing advantage, it’s in their best interest to deliver experiences worth recommending.
Building consumer trust through great customer experience
The customer experience is a constantly evolving journey. Customers have many experiences as they transition through a lifecycle of interactions with a business. With home loan lending, the customer’s journey takes them from learning about your brand, to engaging in early discussions, to closing a deal, to maintaining a relationship with you for the life of their mortgage. Along the way, at every touch point, they are mentally measuring their experience –and if it’s noticeably good or bad, they’re probably talking about it.
To leverage the power of positive word-of-mouth, lenders should consider a few key best practices to ensure they deliver a customer experience that inspires trust, such as:
- Focus on the end-to-end experience – Evaluate the customer experience across all channels to gain a complete picture of how consumers view your business. With all the various players, the mortgage industry can be fragmented, and a mistake made by one party can sour the entire process for a borrower. Designate someone to keep an eye on the customer journey, who’s available to smooth any bumps in the road and strengthen the relationship.
- Grow a customer-centric company – Invest in employee training to help everyone understand how to embody your brand values when they engage with customers. Responding to servicing needs or providing better refinancing rates isn’t enough for consumers. They want experiences that feel good, especially when their money and their home is involved. By building a company culture focused on exceptional customer experience, you increase the likelihood that borrowers will recommend your business to everyone they know.
Delivering a positive customer experience is good for business. In today’s mortgage industry, meeting compliance needs is only the beginning. A winning customer experience can be the key to a much stronger brand and give you a powerful marketing tool.
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By Gavin James on March 12th, 2013
In highly competitive markets, consumers demand real value and exceptional experiences in return for brand loyalty. Businesses need to continuously raise the bar on how well they understand the customer and meet their needs. This becomes more challenging as technology and social business are evolving rapidly, which means organizations need to adapt quickly as consumer expectations change. The following five strategies can help companies understand how to design customer experiences that build brand loyalty and win new business.
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Look at the big picture
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Before you start making improvements here and there, first make sure you really understand your customers’ experience with your business as a whole. Customers see you as one company; they don’t care if you operate in silos, they want a seamless experience from one touch point to the next. Start by “journey mapping” to gain a complete picture of the customer experience across all interactions with your company, as well as their lifecycle of interactions over time. For example, how smooth was the sale process? What kind of continued support have customers received, if any? Do you know their preferred channels of interaction and are you making that easy for them? Are you tailoring new offers to meet their unique needs? Are customers demonstrating their satisfaction by recommending your brand to others?
Taking a holistic perspective helps you focus on optimizing the entire customer journey, rather than isolated touch points. To gain insight, be sure to look at both structured data (e.g., transactions, surveys) and unstructured data (e.g., call center transcripts, social media) as this can uncover connections between interactions across your company, and help you understand how to create an “end-to-end” optimal customer experience. |
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Listen first, then take action
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 Key to understanding the big picture of your customers’ experience is to listen and learn –before you take action. That way you ensure you’re making changes that really matter to your customers, and prioritize improvements that create the biggest wins first. Voice of the Customer (VOC) analytics are a powerful tool for gaining insight about what works and what doesn’t at each touch point as well as across the entire customer journey. Customer “listening” programs (such as VOC and social media monitoring) can also help you identify unmet needs and opportunities for increasing value, which can drive brand loyalty.
Make sure your VOC efforts align with key business objectives to help ensure that any improvements you make will generate measurable value for your customers and the business. For example, to acquire more profitable customers, you can use predictive analytics to define targeted segments based on purchase and interaction patterns, preferences and feedback, and then deliver highly tailored experiences and offers that are most likely to appeal to those customers. |
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Think global, act social
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 When it comes to designing optimal customer experiences, today’s business simply cannot ignore the value of social media. By monitoring social networks, you can learn what your customers really think about your products and your company, which helps you better understand how to deliver experiences that create value and delight. Similarly, with an effective social engagement strategy, you can influence how consumers feel about your brand. For instance, by providing prompt, personalized responses to customer concerns (on Twitter or Facebook), you can transform negative sentiment into brand loyalty. In fact, improving your risk management is a key way your business can gain valuable ROI from social media, as you can reduce attrition and increase customer satisfaction. |
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Build a customer-centric ecosystem
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 Another vital component to delivering an optimal customer experience is to have a company culture that places the customer at the center of everything you do. 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 your employees help make that happen, develop initiatives that build buy-in across your organization and encourage everyone to play a part in optimizing the customer experience –whether it’s best practices in store service, marketing communications, product packaging, technical support, billing, you name it. Creating a company-wide eco-system focused on the customer helps you increase collaboration across lines of business and build a cohesive understanding of how all the various touch points impact the customer. As a result, the entire collective can work together to deliver a consistently great experience throughout the customer lifecycle. |
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Define metrics: Lather, rinse, repeat
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 Central to optimizing your customer experience is making sure you’re doing the right things to deliver value to both your customers and the business. That means you’ll want to define metrics early on that align with key business objectives and customer experience goals. Then, after you’ve taken action, measure the impact. For example, did you reduce customer service calls? Increase response rates for cross-sell offers? Boost customer satisfaction rates and increase word of mouth referrals in social media?
Once you’ve got answers, keep refining the customer experience to meet evolving needs, and keep measuring the impact of your changes. Don’t just focus on measuring volume; be sure to track the impact you’re having on how customers feel about your brand, and look for clues on how to make the right offers at the right time. |
By taking a holistic perspective on the customer journey, and nurturing a customer-centric culture, your organization will be well-equipped to deliver the experiences and value that keep customers coming back, and reduce the cost of acquiring new business.
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By Gavin James on March 7th, 2013
 Imagine if you could increase customer retention and loyalty by quickly resolving pain points and targeting offers to meet each customer’s unique needs. It’s more possible than you think. With the right strategy and tools, you can get the answers you need to solve key business questions and take action to build lasting and profitable customer relationships.
Key business questions affecting retention
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How analytics help you take action to
build value
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How do we reduce churn and retain the most loyal customers to maximize profitability?
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- Uncover reasons behind high attrition rates so you can target improvements where they’ll matter most to your customers.
- Track transaction patterns and service requests, then personalize product and service offerings to meet specific customer needs.
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What defects occur in
our servicing and can we prevent the most
frequent issues?
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- Identify top issues and emerging trends across all interaction channels to help you prioritize fixes to increase retention and potentially reduce servicing costs.
- Monitor risk fluctuations across transactions so you can engage customers promptly to preempt problems that may cause frustration and be costly for your business.
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Which factors are most likely to drive customers
to choose our products
over the competitor’s?
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- Create nuanced segments based on customer behaviors, preferences, and buying patterns so you can make the right offers to the right people at the right time.
- Understand the variables that make high-value customers most likely to purchase, and offer incentives or personalized service.
- Monitor social media comments and trends in sentiment about your products to learn what people like most and why, and leverage insights in your marketing campaigns. Keep an eye on what consumers are saying about your competitors as well, to identify weaknesses that may strengthen your position.
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Leveraging predictive analytics to grow your business
Increasing customer retention is about more than solving problems; it’s about building brand loyalty. To help you understand how to meet and exceed your customers’ expectations, take advantage of all that customer data you’ve got piled up. Predictive analytics can unlock the power across a wide range of data such as:
- Interactions – email, chat, call center, web click streams, in person
- Attitudes – opinions, preferences, needs, desires, (surveys and social media)
- Descriptions – attributes, characteristics, demographics, self-declared information
- Behaviors – orders, transactions, payment and usage history
Putting your “big data” to work is good for growing your business. It’s an expedient, cost-effective way to answer key questions so you can take effective action to retain customers and build stronger relationships.
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By Gavin James on February 20th, 2013
With Consumer Financial Protection Bureau (CFPB) as watchdog, credit card issuers face increased risk of punitive action unless they detect regulatory issues early on and take quick action with improvements. Last year the CFPB slapped multi-million dollar fines on Capitol One, Discover, and American Express for deceptive or illegal marketing practices with credit card customers. Will your bank be next?
Beyond the Arc’s ongoing analysis of the publicly available CFPB customer complaint database enables us to track the top issues, which banks receive the most complaints, and how issues are trending over time. Keeping a close watch on this data can help financial institutions identify and resolve customer pain points to increase retention, while reducing servicing costs and regulatory risk.
Free On-demand Webinar:
Leveraging CFPB Complaint Database Analysis to Improve Customer Experience
Our free webinar highlights how data analytics can identify key issues early on and uncover emerging trends to help banks and credit unions reduce compliance risk, enhance Voice of the Customer efforts, and improve customer experience.
By Steven Ramirez on February 6th, 2013
Ever since the Consumer Financial Protection Bureau (CFPB) made their customer complaint database public in July 2012, Beyond the Arc has been analyzing the data to track the leading issues and which financial institutions are generating the most complaints. The infographic below illustrates our findings for the year of 2012.
We think banks and credit unions should closely monitor complaints as a tool for improving the customer experience, and reducing attrition and regulatory risk. It’s also a great way to keep an eye on weaknesses in your competition as an opportunity to differentiate your business.
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By Gavin James on February 4th, 2013
With increasing regulatory challenges in a competitive landscape, today’s financial institutions need to keep a close eye on reducing complaints. The Consumer Financial Protection Bureau (CFPB) made this even tougher last summer when their customer complaint database was made public. Beyond the Arc’s ongoing analysis of the CFPB database has shed light on the top issues and which banks are generating the most consumer complaints.
We think banks should closely monitor complaints as a tool for improving the customer experience, avoiding attrition, and attracting new business.
Free On-demand Webinar:
Leveraging CFPB Complaint Database Analysis to Improve Customer Experience
Our free webinar highlights how data analytics can identify key issues early on and uncover emerging trends to help banks and credit unions reduce compliance risk, enhance Voice of the Customer efforts, and increase customer satisfaction.
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About the Blog Insights on Customer Experience, including Strategy, Analytics, and Social Business
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