Most South Africans not happy with financial institutions’ handling of complaints

South African consumers do not often complain to financial institutions but if they do, the majority are not happy with how their complaints are handled, the FSCA found in its research. They are usually so dissatisfied that 67% regret even taking out the financial product or service.

Consumers who took part in the survey for the Complaints Management Industry Review Report 2025 of the Financial Sector Conduct Authority (FSCA) indicated that their experiences with internal complaints handling are largely negative, demonstrated by high consumer dissatisfaction scores.

The survey also showed that only 34% of consumers who participated in the survey are aware of financial institutions’ internal complaint handling process, while only 8% ever lodged complaints.

The Complaints Management Industry Review Report 2025 presents the findings of the FSCA’s research to assess the complaints management practices of financial institutions in South Africa. A key part of the FSCA’s mandate is to protect financial customers by promoting their fair treatment by financial institutions.

The reason for assessing the complaint management processes is to:

• establish a baseline for complaints management across the financial sector;
• test the consumer experience with complaints management in the financial sector;
• draw on existing information to map complaints management practices and drive consistent outcomes across the financial sector.

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Questions about how financial institutions handle complaints

According to the FSCA treating customers fairly means that must implement and maintain effective complaints management frameworks that customers can access with ease. This raises a few critical questions:

• Do financial institutions in South Africa have complaints management frameworks and processes in place?
• How effective are the complaints management processes?
• Do the complaints management processes satisfy the needs of financial customers?
• Do financial customers find that the processes drive fair customer outcomes?

The review was conducted in two phases between 2022 and 2023. Phase 1 of the review used a combination of primary and secondary data collection methods, including an online industry survey, in-depth industry interviews, review of case files and an analysis of complaints policies and procedures of financial institutions. Banks were excluded.

Phase 2 of the review was conducted through an online consumer engagement survey with 655 respondents who lodged a complaint with a financial service provider, retirement fund or retirement fund administrator between 2021 and 2023.

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Much can still be done to improve complaints management

According to the report, the review presented a mixed bag of observations regarding the effectiveness, accessibility, and timeliness of financial institutions’ complaints management standards, with each standard presenting room for improvement.

The review found that the majority of the reviewed financial institutions display a commitment to develop and maintain complaints management processes, but although broad commitments are made, not all financial institutions clearly documented complaints management processes and procedures in detail.

Although not all financial institutions have documented timelines for resolving complaints, sampled entities indicated that every effort is made to resolve complaints at first level, within the set turnaround times.

Complaints are frequently handled by lower-level staff rather than senior personnel. Financial institutions mainly have four levels of internal complaints escalation processes.

The consumer survey revealed that a small proportion of financial consumers (8%) lodged complaints between 2021 and 2023 and used a myriad of channels and platforms to lodge complaints. From a consumer perspective, the survey showed gaps in the complaints handling processes.

Consumers indicated they feel that they do not receive adequate feedback on complaints lodged and that institutions sometimes take long to resolve complaints.

The survey showed that 67% of consumers who participated in the survey with the complaints handling processes of the financial institutions, while 63% were dissatisfied with the resolution of their complaints.

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Recommendations to improve complaints handling

The recommendations in the report include:

• To be effective, complaints handling must feature documented processes for receiving, recording, reporting and responding to customer complaints. Complaints handling processes should also align with the overall regulatory requirements and ultimately enhance customer experiences and outcomes;
• Gaps across all three standards of complaints handling present opportunities for continuous improvement, such as getting feedback from customers to identify areas for improvement;
• Financial institutions should ideally establish, maintain and operate an adequate and effective complaints management framework and processes proportionate to their business complexity and size. The effort and complexity of complaints management frameworks will, understandably, not be the same across financial institutions.

The Conduct of Financial Institutions (COFI) Bill, which is expected to be promulgated in the near future, will codify the treating customers fairly outcomes into law and make them applicable to all financial institutions, the FSCA says.