LEGAL NOTE AUGUST 2025: FSCA COMPLAINTS MANAGEMENT INDUSTRY REVIEW REPORT

BACKGROUND

The Financial Sector Conduct Authority (FSCA) is the market conduct regulator of financial institutions in South Africa. The vision of the FSCA is to foster a fair, efficient, and resilient financial system that supports inclusive and sustainable economic growth in South Africa.

A key part of the FSCA’s mandate, as stated in section 57 of the Financial Sector Regulation Act (FSR), no. 9 of 2017, is to protect financial customers by promoting their fair treatment by financial institutions.  

To treat customers fairly, financial institutions need to, among others, implement and maintain effective complaints management frameworks that customers can access with ease. The FSCA conducted research into the complaints management practices of specific categories of financial institutions in South Africa and released the FSCA Complaints Management Industry Review Report 2025 (“The Review Report”) at the end of March 2025.

The Review Report presents the findings of the research conducted by the FSCA to assess the complaints management practices of FAIS category 1 FSPs, retirement funds and retirement fund administrators.  The report also contains recommendations in respect of complaints management practices that financial institutions and retirement funds need to adhere to.

The review report focuses on the assessment of the effectiveness, timeliness, and accessibility of complaints handling by financial institutions with an aim to:

·       Establish a baseline for complaints management across the financial sector;

·       Test the consumer experience with complaints management within the financial sector; and

·       Draw on existing information to map complaints management practices and drive consistent outcomes across the financial sector.

KEY FINDINGS

The review presented a mixed bag of observations in relation to the financial institutions meeting the complaints management standards of effectiveness, accessibility, and timeliness; with each standard adherence presenting room for improvement.

The review found that the majority of the reviewed financial institutions display commitment to developing and maintaining complaints management processes. Although broad commitments are made, not all financial institutions have clearly documented complaints management processes and procedures in detail.

Although not all 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 in the period 2021–2023 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 feel that they do not receive adequate feedback on complaints lodged and that sometimes institutions take long to resolve complaints.

RECOMMENDATIONS

To be effective, complaints handling needs to 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. Among the recommendations mentioned in the report, financial institutions should explore seeking feedback from customers to identify areas for improvement.

Financial institutions should ideally establish, maintain and operate adequate and effective complaints management frameworks 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.

NEXT STEPS

Going forward, the insights presented in this Complaints Management Industry Review Report will assist the FSCA in determining its complaints management supervisory focus areas.

It is noted that in the near future, the COFI Bill will assist in ensuring that complaints management is consistent and applies to all financial institutions. 

The COFI Bill which is still being finalised, will take into account insights from this report and aim to address identified gaps in the complaints framework from a legislative perspective.

The full report is available on request.