Big data is big news. Increasingly commercial organisations and public bodies are starting to analyse the vast amounts of data they now have access to, cross-referencing it with other data sets to improve services, spot business trends and identify potential problems.
It would be great if some of this technical know-how could be deployed to give us more meaningful insight into how customer-focused financial firms really are. Currently we only have complaints data published by the Financial Conduct Authority and the Financial Ombudsman. Incredibly, just five years ago we didn’t even have this. While this move was a step in the right direction, it’s time to shift it up a gear.
At present neither set of figures seems to give us any great understanding as to which companies you’d want to put your money with. The only conclusions to be drawn are that squillions of people are still pursuing payment protection insurance claims and that larger companies with more customers get more complaints.
Not surprisingly, much of the coverage focuses on the ‘most complained about companies’, which inevitably means ‘the most complained about bank’. This dubious honour tends to be shared between Lloyds and Barclays. It all depends on which set of figures you use. Include all the brands with the Lloyds Banking Group and it comes off worse; split them up and it goes to Barclays. Not surprisingly, whichever set of figures you use, one of them will point out that you’re comparing apples with pears.
I suspect very few consumers look at this data, and only a microscopic proportion use it to influence what products they buy. Take private medical insurance for example. Would the fact that Bupa had 211 complaints going to the Ombudsman, which is considerably more than the 52 from Aviva Health or 58 from Axa PPP, make you think twice before buying a Bupa product? And should it, given the size of Bupa?
I don’t think you need to be a genius in data analysis to work out that what we really need here is a measure of how many complaints are received per 1,000 customers. Then we’d get a more realistic picture of how companies compare to others selling similar products and which ones are taking customer service seriously, rather than just paying lip-service to this idea. I can’t believe that the FCA and FOS aren’t capable of doing this. Or are there vested interests out there that are reluctant to see such information published?
In a similar vein I think we could have better data on insurers’ claims records. After all, when customers buy insurance they are basically buying a promise. We know the price, we know the terms and conditions. What we don’t know is how good insurers are at keeping these promises or how long it takes them to settle.
I know there are percentage figures published on certain types of business, such as critical illness. Are there similar figures widely available for, say, car and travel insurance? And is there other data you think would give a more telling picture of an insurer’s track record? It would be particularly interesting to see what the claims record is like of the cheap-as-chips, no frills brands that top the comparison sites.
Talking of comparison sites, given the data that most of them collect and no doubt sell on, they may be perfectly placed to conduct such analysis and track what happens after customers have bought these policies. How much more useful would it be to see what percentage of claims are paid and how long it took, next to the premium quoted.
Advisers too should be mining these data fields and lobbying for better disclosure. They have the knowledge and the technology to explain to clients what it means and demonstrate that with any kind of financial product there’s far more involved than just the price.
Emma Simon is a freelance journalist