From complaints to confidence: The digital future of transaction dispute resolution in banking
Empowering trust through efficient transaction dispute resolution in banking
Resolving customer complaints quickly and equitably is critical to building and maintaining trust in any business brand. That’s particularly the case for banks when customers are disputing a financial transaction. However, resolving transaction disputes in an omni-channel world can be a challenge for financial organizations that lack the digital infrastructure critical to an efficient complaints management system.
In this article, we will look how financial organizations can use information technology to resolve transaction disputes quickly and equitably. By ensuring customers only need to tell their story once, you will save time and money on processing transaction disputes. At the same time, you will build your reputation with customers and merchants for fair dealing and efficient transactional banking services.
What is a financial transaction dispute?
Transaction disputes occur when two parties (typically a buyer and a seller of goods or services) disagree about some aspect of a financial transaction between them. Such disputes can arise for various reasons, such as:
- A simple error or misunderstanding between buyers and sellers
- An unauthorized transaction (either accidental or deliberate)
- Non-receipt of goods or services
- Dissatisfaction with goods or services
- Disputed charges (such as additional costs for deliveries or returns).
If a customer notices an unauthorized (or unexpected) transaction on their bank or credit card statement, they will typically raise a transaction dispute report with their bank or credit card provider. Increasingly they will initially attempt to do this either through a digital banking app or online. However, despite the prevalence of digital banking, many will still find themselves redirected to human assisted channels (in-branch or call center) where they will have to repeat their story (often multiple times).
As McKinsey noted in their recent report on balancing digital and physical channels in retail banking: "Globally, banks have successfully migrated more than 80% of core physical interactions [online].” However, “only 20% of transaction disputes are addressed digitally."
Ensure your app offers all core servicing functionality
At VeriPark, we believe that customers should only ever have to share their stories once with a complaints & service request management system. This requires omni-channel banks to ensure a seamless flow of information between their digital and physical channels. That can be done by integrating a robust Customer Relationship Management (CRM) platform across the backend of all your distribution channels to create an advanced digital core to your banking system.
Full CRM for banking integration enables a coordinated and speedy response to disputed transactions, whether raised online or in-branch. It effectively empowers bank employees to resolve matters as close to the initial point of purchase as possible. As McKinsey says: "Banks offering such mobile functionality experience 18% fewer inbound agent calls and 50% fewer calls related to transaction disputes.”
How customers and merchants experience efficient transaction dispute handling
Your customer gets their refund fast
Jade orders a home delivery of food on her mobile. She pays using her credit card. When her next statement arrives, she notices that she has paid twice for the same order.
She opens her banking app and raises a duplicate transaction report with her card provider. She uploads a copy of the retailer’s invoice that came with confirmation of her order. This automatically creates a case number in her bank’s CRM.
She can now track her case on her mobile. She can see that it has gone to the bank’s review team and that they have issued a chargeback request to the merchant.
She is delighted to see her account speedily recredited with the disputed amount.
The merchant can focus on their business
The merchant logs into their online accounting portal. They see a notification of a refund request for a duplicate transaction. The notification has come from Jade’s bank, it includes details of the order number from her invoice.
The merchant verifies both the original transaction and the credit card invoice. They can see that the payment has been duplicated and immediately approves the full refund.
The operations team at the merchant’s bank recredits Jade’s account with the disputed amount and closes the case in the CRM.
Neither the merchant nor Jade has had to speak to anyone. Both have a complete record of the process. They can get on with their lives.
Digitalizing transaction disputes is good for your financial brand and your banking business
VeriPark has identified several key benefits to efficiently resolving financial transaction disputes:
- Customer retention – by demonstrating that you listen to and address customer concerns, you will build trust with your customers, which means they are more likely to continue using your services
- Reduced chargebacks – effective dispute resolution means banks don’t have to use their own revenue to reimburse customers, at the same time they avoid additional administrative costs and potential fines
- Fraud detection – reviewing data from transaction disputes can sometimes highlight patterns of fraudulent activity, which banks can then seek to prevent in future
- Improved customer service – banks can gain valuable insights into customer needs and preferences by analyzing dispute types, which they can then use to improve products, services and marketing.
VeriPark helps financial organizations build integrated omni-channel services
We work with retail and commercial banks and financial services providers around the globe to provide their customers with seamless online, mobile, and in-person services. Our range of digital banking solutions include onboarding and offboarding, payments and personal finance management, as well as providing banks with a single view of their customers to maximize cross-selling and up-selling opportunities.
Find out how we can help you and read how our customers are using our transformational digital banking and CRM solutions to grow their business, and simplify customers’ lives.