The Financial Conduct Authority (FCA) has outlined plans to overhaul how complaints data is reported by regulated companies, forming part of a wider five-year strategy aimed at simplifying regulatory processes across the UK financial sector.
According to a consultation paper released by the regulator, the proposed framework seeks to replace five existing reporting returns with a single consolidated return.
The proposed single return would eliminate the need for firms to complete multiple reports, which the FCA noted can lead to duplication and inconsistencies in submitted data. It added that a consolidated system would lower the risk of misreporting and make it easier for supervisors to interpret the information provided.
The authority said that aligning reporting schedules across all regulated entities would help it identify trends and sources of consumer harm more quickly.
The FCA also noted that it has not reviewed its complaints data collection since 2015 and intends the updated approach to enhance consistency, improve data quality, and reduce reporting obligations for firms.
Recent FCA data shows that complaints related to insurance and pure protection products decreased by 6.0% between the first and second halves of 2024, falling from 764,272 to 718,496.
Despite the overall decline, motor and transport insurance remained the most complained-about product category, with 276,794 complaints in H1 2024. Medical and health insurance complaints, however, rose by 12.4% in the same period, reaching 95,886 cases.
The total value of redress payments by insurers increased slightly to £62.3 million in H1 2024, up from £62.2 million during the same period in the previous year. The average redress amount also rose by 6.0% to £81.42, compared to £76.81 in H1 2023.
Regarding the handling of complaints, FCA figures for H2 2024 indicate that 44.68% of complaints were closed within three days, while a further 50.04% were resolved between three days and eight weeks. The proportion of complaints upheld by firms remained steady at approximately 57% over the course of the year.
Brian Nimmo (pictured above), head of redress at Broadstone, commented that the FCA’s proposed changes are expected to reduce unnecessary burdens on firms and support the regulator’s efforts to identify and address consumer harm.
“Accurate and timely data is critical to helping the regulator analyse where sectors or individual firms are falling short and require closer scrutiny,” Nimmo said. “The changes are integral to the achieving FCA’s objectives of improving outcomes, reducing the regulatory burden and the fair treatment of consumers. Any measures that help meet these criteria are to be welcomed.”
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