Firms reported 1.85 million complaints in H1 2026, a 6.3% increase on the previous six months, according to the latest FCA complaints data. The figures are a reminder of the importance of understanding where things go wrong for customers, and using that insight to improve products, services and support.
For firms, the priority is to understand what complaints reveal about their business: where problems keep recurring, which products, customer journeys or processes account for a disproportionate share, and whether customers in vulnerable circumstances receive outcomes as good as those of other customers.
Turning insight into action
Effective root cause analysis should lead to clear action. Firms need to identify recurring problems, understand who is affected, assign responsibility for putting things right and check whether the changes work. Where an issue could affect customers who have not complained, firms should consider whether wider action is needed.
This means connecting complaints insight with operational decisions, product reviews and Consumer Duty oversight. Reporting a recurring issue month after month should prompt challenge: what has changed, and is it making a difference?
Resolving complaints quickly is not the same as resolving them well
The FCA reported that 94.5% of complaints were closed within eight weeks in H1 2026, and 54.8% of closed complaints were upheld. Timeliness is only one measure of performance. Firms also need to understand whether decisions are fair, redress is appropriate and underlying problems are being addressed.
How firms respond when things go wrong can shape customer trust and loyalty. Our recent Consumer Duty research highlighted the importance of customer support in building trust. Firms need confidence that complaint investigations are thorough, decisions are consistent and communications are clear. Quality assurance and outcomes testing should assess both the resolution and the support customers receive throughout the complaint journey.
Preparing for vulnerable customer reporting
New complaints reporting requirements from January 2027 will require firms to capture more detailed information, including on complaints involving customers in vulnerable circumstances.
Firms should prepare now to record this information reliably, including whether complaints arise from a failure to recognise or respond to a customer’s vulnerability. This requires suitable systems, clear processes and staff who understand what to record. The information should also help firms identify gaps in support and assess whether improvements are working.
How Square 4 can help?
Whether you’re facing rising complaint volumes, struggling with a backlog, concerned about the quality of complaint outcomes or looking to strengthen support for vulnerable customers, Square 4 can help.
Our complaints services combine Regulatory Advisory, Interim Resourcing and Managed Services. We provide practical support across complaints operating models, root cause analysis, quality assurance and outcomes testing, alongside specialist resources to strengthen teams and reduce backlogs.
Our Leeds-based Managed Service provides end-to-end complaint handling, combining experienced practitioners with AI-enabled technology, CRM optimisation and process improvements to deliver efficient, consistent and well-controlled outcomes.
Get in touch if you want to discuss how we can help turn complaint insight into meaningful, sustainable improvement.
