I am honoured to have been chosen as the new Chair of the Board of the Financial Ombudsman Service and I would like to acknowledge my predecessor Peter E Daly’s leadership and championing of the Financial Ombudsman Service particularly over the past year.
As the previous Chair of the Banking and Financial Services Ombudsman Board, I also served on the Financial Ombudsman Service transitional Board. As such, I am no stranger to the organisation or the financial services industry.
Our first year of operations has coincided with a turbulent period within the financial markets. This has created an unprecedentedly high number of disputes being referred to the Financial Ombudsman Service. Many disputes have arisen because people have experienced anxiety about their investments or found themselves in financial difficulty or hardship. Add to this the considerable choice, sophistication and complexity created by the very wide range of products being offered and we have a challenge to meet.
In many ways therefore, the creation of the single amalgamated Financial Ombudsman Service could not have been more timely. It offers a ‘one stop shop’ for consumers and small businesses for the spectrum of financial products and services sold by a broad range of financial services providers.
Building on this strong foundation now in place, we continue to focus on promoting resolution of customer disputes by financial services providers, helping to reduce the instances where their customers become our ‘customers’. Early resolution without the breakdown of a relationship is the most effective way to create customer satisfaction and customer retention for our members. Prompt resolution of a problem is generally the key desire of customers.
We will continue to raise awareness of the Financial Ombudsman Service in the Australian community. This will be achieved through a range of targeted events and promotions. These activities are based on a robust approach to identifying where the greatest needs lie. We need to ensure consumers are aware of the avenue to resolution offered by the Financial Ombudsman Service.
The Financial Ombudsman Service will be taking a leading role within the new consumer credit regime that comes into play in 2010. This legislation will see a new credit service provider license system in place. The regime is designed to improve the standards of service for the industry, while offering consumers greater protection. This new licensing system will see a potential addition of many new members coming to us. Our staff have extensive experience in credit disputes, especially in claims of responsible lending and hardship and in the negotiation of effective commercial outcomes for the parties.
We will also be working diligently to ensure everything we do complies with the new ASIC Regulatory Guide 139: Approval and oversight of external dispute resolution schemes. We are already further improving our reporting approach to assist in better dispute resolution performance for all of our members. This is reflected in the amount and presentation of statistics in this review.
We will continue to enhance our understanding of the recurring and emerging problems for consumers across the broad range of financial products and services and types of members that now fall within our new Terms of Reference.
Finally, I would like to introduce the new Financial Ombudsman Service Board to you, many of whom will be familiar faces.
Together we will be working with the Ombudsmen* and staff to build on the already strong foundation that the Financial Ombudsman Service has in place.
Professor The Honourable Michael Lavarch
Chair of the Board
*Recruitment for a new Ombudsman – General Insurance is still underway at time of printing