The Financial Ombudsman Service is not meeting efficiency standards, according to a just released independent review completed in July 2013 of the ASIC-approved body.
The review, by CameronRalph Navigator, assessed the FOS against ASIC’s benchmarks for external dispute resolution (EDR) schemes, which are accessibility, independence, fairness, accountability, efficiency and effectiveness.
While it met five of the standards, the review found that more work needed to be done about its efficiency, with concerns noted about the time taken to resolve disputes and the impact of this on consumers and those in financial services.
“We found some fundamental aspects of FOS’s performance which we, and FOS itself, recognise as not meeting stakeholder expectation,” the report said. “Our key conclusion was that the current FOS organisational model has reached the end of its effective life and to meet those expectations, must move to its next stage of evolution.”
The present resolution approach used by the FOS to address financial difficulty disputes does not adequately recognise their unique nature, which results in an “unnecessarily laborious process of coming to grips with the immediate, most pressing issues”, the report said.
Its recommendations centre on the process and structure of the FOS – and it suggests that the next era of the service should move to smaller, vertically integrated, and more flexible teams.
Apart from these downfalls, the review did highlight the FOS’s management effort, which has achieved significant improvement in consistency, quality and efficiency in many areas.
In a media statement, the FOS said that it welcomed findings that it has made significant improvements in performance in recent years. It also acknowledged the concerns about efficiency standards.
“The FOS Board shares the concerns about the time taken to resolve disputes and the impact this has on both consumers and financial services providers, and has taken steps to address these issues”.