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Improving Recourse System in Digital Financial Services (DFS)

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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 order to provide an improved recourse system the following steps need to be taken:

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. Several providers have therefore created dedicated agent lines that allow agents to fast-track their issues.

Leverage local agents to detect problems and provide adequate solutions for them. Distance between customers and the headquarters of a financial service provider is a common barrier for low-income and rural customers that prevent them from filing and resolving complaints. 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.

A key benefit of the new DFS channels and services is their ability to improve the number and accessibility of recourse options for customers. At a minimum, consumers should be able to reach customer care and resolve a problem by all the channels they use to transact.

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.
Recourse systems will need to evolve in response to new product innovations. 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.

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.

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