WEBINAR: Leveraging CFPB Complaint Database Analysis to Improve Customer Experience
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Transcript of WEBINAR: Leveraging CFPB Complaint Database Analysis to Improve Customer Experience
Beyond the Arc, Inc. | Management Consulting & Strategic Communications
Leveraging CFPB complaint database analysis to improve customer experience
Brandon Purcell, Analytics Team LeadNick Baldocchi, Assistant Analyst
Beyond the Arc, Inc.
Beyond the ArcMonthly webinar series
January 31, 2013
Beyond the Arc, Inc. | Management Consulting & Strategic Communications
Imagine If you could…
…identify competitors’ strengths and weaknesses?
…detect and address regulatory risks before they result in costly fines?
…identify key customer pain points to improve the customer experience and drive retention?
Our analysis of the Consumer Financial Protection Bureau (CFPB) credit card complaint database can help you identify key issues early on and uncover
emerging trends to reduce your risk and costs.
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Beyond the Arc, Inc. | Management Consulting & Strategic Communications
Discussion agenda
• Background on the CFPB• Analysis results• VOC and complaint management• Next steps
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Beyond the Arc, Inc. | Management Consulting & Strategic Communications
Discussion agenda
• Background on the CFPB• Analysis results• VOC and complaint management• Next steps
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Beyond the Arc, Inc. | Management Consulting & Strategic Communications
Since its inception, the jurisdiction of the CFPB has grown to include many products and services
• Bank accounts• Bank services• Credit cards• Credit reporting• Money transfers• Mortgages• Student loans• Vehicle or consumer loans
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Beyond the Arc, Inc. | Management Consulting & Strategic Communications
The CFPB has also expanded the types of financial institutions that fall within its purview
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• Large banks and their affiliates• Credit unions (above $10 billion)• Nonbanks• Residential mortgage companies• Payday lenders• Private education lenders• Credit reporting agencies
Beyond the Arc, Inc. | Management Consulting & Strategic Communications
Financial institutions paid over half a billion dollars in 2012
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Institution Payment Date Reason
Capital One $210 million July 18, 2012 Deceptive marketing practices
Discover $214 million Sept. 24, 2012 Deceptive marketing practices
American Express $112.5 million Oct. 1 2012 Illegal credit card practices
Beyond the Arc, Inc. | Management Consulting & Strategic Communications
Research is clear: increase in revenues for card issuers driven by improved experience
Total revenue potential
Churn reduced
Add’l purchases
Word of mouth
Temkin $246M $91.8M $82.3M $72M
Forrester $307M $83M $213M $12M
• Incremental purchases from existing customers in the same year. • Revenue saved by lower churn. • New sales driven by word of mouth.
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Beyond the Arc, Inc. | Management Consulting & Strategic Communications
How does this affect banks, credit unions and other financial institutions?
• Financial institutions are now subject to more stringent regulatory requirements – Regulatory creep
• Consumers now have multiple avenues to voice complaints• Companies need solid complaints management process to avoid costly regulatory exposure• What if we could identify and address complaints before they
become complaints, or even worse, regulatory issues?
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Beyond the Arc, Inc. | Management Consulting & Strategic Communications
Introduction to the CFPB Database
• Last year, the CFPB made its database of consumer credit card complaints available to the public• It was made public “to improve the transparency and efficiency of this essential consumer market” (CFPB)• In 2012 the CFPB database contained:
– 15,056 complaints– 76 different financial institutions
• http://www.consumerfinance.gov/complaintdatabase/10
Beyond the Arc, Inc. | Management Consulting & Strategic Communications
Several key variables in the database can help add depth to analysis
• Company• Issue• Submitted via• Date received• Zip code• Company response• Timely response?• Consumer disputed?
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Beyond the Arc, Inc. | Management Consulting & Strategic Communications
Discussion agenda
• Background on the CFPB• Analysis results• VOC and complaint management• Next steps
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Beyond the Arc, Inc. | Management Consulting & Strategic Communications13
Top 10 companies scaled by number of cards in circulation
January 2012 – December 2012
Beyond the Arc, Inc. | Management Consulting & Strategic Communications
January 2012 – December 2012
Top 10 issues based on total database complaints
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Beyond the Arc, Inc. | Management Consulting & Strategic Communications
Top 5 companies – trended
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January 2012 – December 2012
Beyond the Arc, Inc. | Management Consulting & Strategic Communications
Top 5 issue trends for 2012
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January 2012 – December 2012
Total number of complaints each month
Beyond the Arc, Inc. | Management Consulting & Strategic Communications17
Capital One and Amex experienced peaks in complaints around the time of their fines
Paid $210M on 7/18
Paid $113M on 10/1Paid $214M on 9/24
January 2012 – December 2012
Beyond the Arc, Inc. | Management Consulting & Strategic Communications
Top companies with untimely responses to consumer complaints
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January 2012 – December 2012*Minimum 30 complaints
Beyond the Arc, Inc. | Management Consulting & Strategic Communications
Ranks of companies that extend monetary relief
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January 2012 – December 2012
Beyond the Arc, Inc. | Management Consulting & Strategic Communications
Top issues that result in monetary relief
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January 2012 – December 2012
Beyond the Arc, Inc. | Management Consulting & Strategic Communications
Beyond the Arc collects social media and financial services data for analysis and reporting
• Our Social Customer Insights service:– Contains over 336 million social media posts from
• Twitter• Facebook• Industry blogs and forums
– Related to the top 100 banks and credit unions– Over the past 18 months– About 800,000 posts a day
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Beyond the Arc, Inc. | Management Consulting & Strategic Communications
We discovered a correlation between Discover’s billing dispute complaints and social media
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January 2012 – December 2012
Beyond the Arc, Inc. | Management Consulting & Strategic Communications
Billing dispute complaints peaked in July and October
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January 2012 – December 2012
Beyond the Arc, Inc. | Management Consulting & Strategic Communications
A peak in social media comments about Discover bills preceded a spike in complaints
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January 2012 – December 2012
Soci
al M
edia
CFPB
Beyond the Arc, Inc. | Management Consulting & Strategic Communications 25
• my discover credit card bill is due tomorrow and their site isn't working #lovely
• Q&A: When the hell am I supposed 2 pay my discover card bill?
• i feel so good when I pay my credit card bill. discover be harassing me way before my bill is due.
Discover billing dispute comments
Beyond the Arc, Inc. | Management Consulting & Strategic Communications
Similarly we noticed a correlation between Citibank APR complaints and social media
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January 2012 – December 2012
Beyond the Arc, Inc. | Management Consulting & Strategic Communications
Citibank APR complaints peaked in June
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January 2012 – December 2012
Beyond the Arc, Inc. | Management Consulting & Strategic Communications
Social media comments about Citibank APR show a sharp spike in May
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January 2012 – December 2012
Soci
al M
edia
CFPB
Beyond the Arc, Inc. | Management Consulting & Strategic Communications 29
• 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?‘
• Now that I am close to paying off almost all of my credit card debt, it feels so good to tell these credit card companies they have to drop my interest rate to something competitive… Citibank can kiss my a$$ with their terrible outsourced customer service.
Citibank APR sample comments
Beyond the Arc, Inc. | Management Consulting & Strategic Communications
Many companies have voiced their concern about the CFPB and the complaint database
Concerns about the database:• Complaints are not verified for accuracy• Not representative of the population as whole• Cannot determine if complaints are related to dissatisfaction ormisunderstanding terms of service•However, analysis of issues in the CFPB can help you determine where the customer experience is falling short
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Beyond the Arc, Inc. | Management Consulting & Strategic Communications
Discussion agenda
• Background on the CFPB• Analysis results• VOC and complaint management• Next steps
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Beyond the Arc, Inc. | Management Consulting & Strategic Communications
How do customer problems become complaints?
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Customer experiences a problemCustomer experiences a problem Customer provides feedbackCustomer provides feedback
Bank addresses problemBank addresses problem ResolutionResolutionFiles complaint with CFPBFiles complaint with CFPB
Closes account(s)Closes account(s)and / or Customers often try multiple time to resolve their problems Bank does not address problemBank does not address problem
Beyond the Arc, Inc. | Management Consulting & Strategic Communications
How can we identify and address these issues so they don’t escalate?
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Customer experiences a problemCustomer experiences a problem Customer provides feedbackCustomer provides feedback
Bank addresses problemBank addresses problem ResolutionResolution
Bank does not address problemBank does not address problem
Files complaint with CFPBFiles complaint with CFPB
Closes account(s)Closes account(s)and /or Customers often try multiple time to resolve their problems
Beyond the Arc, Inc. | Management Consulting & Strategic Communications
We need to focus on collecting, analyzing, and tracking customer feedback
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Customer experiences a problemCustomer experiences a problem Customer provides feedbackCustomer provides feedback
Bank addresses problemBank addresses problem ResolutionResolution
Bank does not address problemBank does not address problem
Files complaint with CFPBFiles complaint with CFPB
Closes account(s)Closes account(s)and /or Customers often try multiple time to resolve their problems
Beyond the Arc, Inc. | Management Consulting & Strategic Communications
Voice of the Customer analysis is the key to preventing feedback from escalating
• Voice of the Customer (VOC) analysis allows you to:– Identify customer pain points to improve the customer experience and drive retention– Detect regulatory risks andaddress them before the CFPB takes punitive action
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Beyond the Arc, Inc. | Management Consulting & Strategic Communications
What is VOC?
A Voice of the Customer program uses text analytics to turn your unstructured data into structured data…
so you can quantify what your customers are talking about for analysis and take action36
Beyond the Arc, Inc. | Management Consulting & Strategic Communications
Listen
Define
Report
Analyze
Key steps to strengthening Voice of the Customer
Act
1. Define your VOC strategy2. Listen to the VOC3. Analyze and track customer feedback4. Report on the findings5. Act to improve the customer experience6. Measure resultsMeasure
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Beyond the Arc, Inc. | Management Consulting & Strategic Communications38
Include external measurements to create an integrated view of the customer
InternalData from across the enterprise
o Customer feedbacko Frontline noteso Transactional datao Behavioral data
SocialSocial media about you and your competitors
o Twittero Faceb
ooko Blogs
RegulatoryCustomer complaints
o Federalo Stateo CFPB
The CFPB database is a meaningful data source to incorporate into your VOC program
Beyond the Arc, Inc. | Management Consulting & Strategic Communications 39
• Determine key metrics
– # of CFPB credit card complaints
– # of untimely responses
– Volume of credit card related customer feedback
– Call volume to credit card customer service
• Translate metrics into ROI– i.e. Savings = (Reduction in call volume) * (average call time) *
(employee hourly wage)
Measuring your results is the key to a successful VOC program
Beyond the Arc, Inc. | Management Consulting & Strategic Communications
Discussion agenda
• Background on the CFPB• Analysis results• VOC and complaint management• Next steps
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Beyond the Arc, Inc. | Management Consulting & Strategic Communications
How can your company leverage the CFPB database and VOC analysis
• Analyze and track the CFPB complaint database on an ongoing regular basis• Calibrate your VOC program to identify customer irritation and problems before they escalate• Enhance your VOC program by adding new internal data sources as well as external sources like social media to get a clearer picture of the customer experience• Use VOC data to drive customer experience improvements and take action, then measure results
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Beyond the Arc, Inc. | Management Consulting & Strategic Communications42
A little about us
Highlights and credentials• Recognized by Forrester Research among 15 top firms in Customer Experience Consulting• Social media panelist, BAI Retail Delivery Annual Conference 2012• Faculty Fellow, Pacific Coast Banking School, August 2012• Featured speaker on VOC best practices, Text Analytics World 2011• Featured speaker on social media data mining, American Bankers Association 2011
Recent press• Loyalty Magazine
, Summer 2012• Destination CRM, May 2012• American Banker/Bank Technology News, Jan 2012• BAI – Retail Banking Strate
gies, Jan 2012• ABA Banking Journal, Jan 2012• CUES, Credit Union Management, Jan 2012• Social Business Today, Customer Experience Management @ TMC.net, and numerous blogs and online publications
AnalyticsStrategy Insights Action
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Beyond the Arc, Inc. | Management Consulting & Strategic Communications
Questions?
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Beyond the Arc, Inc. | Management Consulting & Strategic Communications
Thank youBrandon Purcell, Analytics Team Lead
Nick Baldocchi, Assistant Analyst
Steven J. Ramirez, CEO
Beyond the Arc, Inc.
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Office 310.913.3802Email [email protected]
Digital beyondthearc.com
@beyondthearc
Facebook.com/beyondthearc
Slideshare.net/beyondthearc
Beyond the Arc, Inc. | Management Consulting & Strategic Communications
Disclaimer and copyright
This document was prepared by Beyond the Arc, Inc.This document provides our commentary and analysis. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information,
there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.
No warranty expressed or implied.The information provided in this presentation is not intended nor should be used as a substitute for legal advice or other expert opinions and services in specific situations.This material may not be distributed.Other company, product, and service names may be trademarks or service marks of others.
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