FSCA's review reveals critical gaps in banks' complaints handling processes

The FSCA conducted a sector-wide review to assess the extent to which
banks’ complaints handling arrangements are delivering fair outcomes for complainants, as required by Conduct Standard 3 of 2020

The FSCA conducted a sector-wide review to assess the extent to which banks’ complaints handling arrangements are delivering fair outcomes for complainants, as required by Conduct Standard 3 of 2020

Published Mar 18, 2025

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The Financial Sector Conduct Authority (FSCA) has shed light on significant discrepancies in the complaints management processes of South Africa's banking sector.

This comes following a comprehensive thematic review aimed at measuring the alignment of these processes with established regulatory requirements.

The findings reinforce the FSCA's unwavering commitment to enhancing industry practices while ensuring the fair treatment of financial customers.

The FSCA is the market conduct regulator of financialinstitutions in South Africa manfated to protect financial customers bypromoting fair treatment of financial customers by financial institutions, including banks

Conducted as part of the FSCA's ongoing supervisory efforts, the review assessed how effectively banks were managing complaints, particularly in relation to Conduct Standard 3 of 2020 (Banks).

This pivotal standard, which came into force in July 2021, lays down rigorous expectations for how banks should treat their customers fairly, especially when issues arise.

At the heart of the review was a thorough examination of banks' protocols regarding complaints management, with a focus on four critical areas: the categorisation of complaints, quality of record-keeping, communication with customers, and transparency about customers' rights to seek assistance from relevant financial ombud schemes.

While the FSCA acknowledged that numerous banks have made commendable strides in refining their complaints handling to align with regulatory mandates, it also highlighted a series of persistent challenges that remain evident across the sector.

  • Inconsistencies in categorisation: A notable issue identified was the inconsistent categorisation of complaints. This shortcoming has resulted in inaccuracies in reporting, which can undermine the overall integrity of the complaints management framework.
  • Deficiencies in record-keeping: The review found that inadequate record-keeping practices hinder effective oversight and informed decision-making within banks, posing potential risks to accountability and customer satisfaction.
  • Poor communication with complainants: Many banks have been found lacking in their duty to keep complainants informed throughout the process. This lack of transparency can breed frustration and dissatisfaction among customers who feel sidelined in their own grievances.
  • Limited information on ombud schemes: The FSCA noted a troubling trend where banks fail to adequately disclose the availability of ombud redress mechanisms. Such omissions severely limit complainants' awareness and ability to pursue alternative avenues for redress.

As the FSCA continues its oversight role, it said the findings of this thematic review underscored the need for a cohesive and compliant approach to complaints management in the banking sector.

The authority is poised to collaborate with all stakeholders to address these challenges, ensuring that the rights and interests of financial customers are not only acknowledged but fiercely protected.

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