Improving Recourse Systems in Digital Financial Services
Efficient and consumer-friendly complaints handling, or recourse, is critical for encouraging customers to use formal financial services for the first time. Effective recourse helps to reassure users of new financial services that if they encounter a problem, their money is protected and they will be able to resolve the issue. As digital finance disperses provider-customer contact points through agents, merchants, and digital channels, there are new implications for recourse systems. In CGAP’s new Brief, "Recourse in Digital Financial Services: Opportunities for Innovation," we highlight several new approaches for innovative recourse in digital financial services (DFS). For providers seeking to improve their DFS recourse systems, we highlight here the top five aspects they should take into consideration.
1. Make the call center free, with a dedicated hotline for agents. This would seem self-evident, but surprisingly many providers still do not offer a toll-free complaints line. In interviews with low-income customers this was a frequent barrier to making formal complaints (as was long hold times for the hotlines). Agents also reported waiting for long periods on hold or spending airtime to resolve customers’ issues as well as their own. Several providers have therefore created dedicated agent lines that allow agents to fast-track their issues.
2. Leverage agents to do triage and detect problems like fraud. Distance between customers and the headquarters of a financial service provider is a common barrier for low-income and rural customers that prevents them from filing and resolving complaints. The use of local agents in many DFS models offers an opportunity to mitigate this barrier. When properly trained, agents can also serve as a form of triage for consumer complaints, limiting the number of minor inquiries or basic questions that are directed to the consumer hotline. Agents become better positioned to deal with customer complaints when they have access to a dedicated hotline, which they can use to resolve more serious or urgent issues—such as payment reversals. When trained and equipped appropriately, agents can become front-line customer care contact points and ultimately be a force for improving consumer experience, and have even helped to prevent issues such as fraud or scams perpetrated on DFS customers.
3. If I can transact by it, I can complain by it. A key benefit of the new DFS channels and services is their ability to improve the number and accessibility of recourse options for customers. For example, one mobile network operator (MNO) in Ghana offers at least seven different channels where customers can present an initial customer complaint, including toll-free call center number, agents, sales offices, and periodic “road shows” by staff. An MNO in Kenya employs a dedicated social media team that uses channels such as WhatsApp, Facebook, and Twitter to resolve complaints. This shows that DFS providers are starting to segment consumers and identify common issues to customize the complaints handling process and increase efficiency in handling and resolving consumer inquiries across growing product lines and touchpoints. At a minimum, consumers should be able to reach customer care and resolve a problem by all the channels they use to transact.
4. Understand that transaction points should influence the design of a recourse system. The primary transaction point, whether it is at an agent or through customers’ own mobile wallets, should inform the design of a recourse system. Our interviews with customers in both primarily wallet-based and primarily over-the-counter DFS businesses indicated that they often use recourse channels differently. When using mobile wallets, customers will generally need to be able to conduct more of the transactions on their own, while in OTC models the agent plays a leading role in sending, receiving, and cashing out the money using the agent’s own account. This distinction creates different risk points and responsibilities between consumers and agents when problems occur, and it also appears to lead to more wallet-based consumers utilizing the customer care hotline, while many OTC consumers appear to rely heavily on the agent to present a first-order complaint.
5. Have a plan for value-added services and partnerships. Recourse systems will need to evolve in response to new product innovations. The addition of credit, savings, and insurance products to DFS represent more complex product lines than payments, with variable terms and longer tenor. In addition, these services may rely less on agent networks and be delivered through a more complicated and multi-step user interface. These more complex financial products require increased sophistication in customer care. It is important that special units be established and specifically trained to handle inquiries for these more complex DFS products. In addition, the increased number of partnerships (for example, a bank and MNO for a savings account) will require effective back-end coordination from the provider receiving the complaints and the provider where these accounts actually reside. This includes communicating where the complaint resolution responsibility lies to the customer in partnerships. For example, while M-Pawa in Tanzania is a bundled loan and savings product offered and held by Commercial Bank of Africa (CBA), the advertising, as well as the complaints resolution systems, emphasize MNO partner Vodacom as the customer-facing brand and responsible party for complaints handling. To improve the complaints handling experience, CBA provides the upfront specialized training for the MNO call center staff. In India, Eko, a DFS provider that has multiple banks as partners, has developed support tools such as process manuals for each partner bank to standardize complaints processes across Eko’s partnerships.
This review of emerging practices in recourse for DFS shows that there is great potential to build effective recourse systems that are worthy of the innovative products they serve, and can help support use of these products by consumers even in the face of initial challenges. By investing sufficiently in their recourse systems, providers will benefit in several ways, including increased data on consumer behavior and product preferences, fraud detection and mitigation, and increased product uptake and usage.