FOS publishes action plan for changing and improving its service, Anna Davis

Written by Zhuan Faraj

On 2 December 2021, the Financial Ombudsman Service (“FOS”) published an action plan setting out the key strategic and operational changes that the Financial Ombudsman is undertaking.

Background

Complaints relating to payment protection insurance are finally drawing to a close and FOS’s casework is becoming increasingly more diverse. The retail financial services market has been undergoing an unprecedented period of change, with radical shifts in the range of products offered to customers and the number and variety of providers offering them. The challenges arising from the pandemic are contributing to an acceleration of the pace and intensity of this change. The expansion of financial services onto the internet continues to be accompanied by an increase in cyber-crime. There are increasingly sophisticated scams, leading to an increase in the number of cases being brought to FOS. And with higher than expected numbers of cases received during the pandemic, customers are experiencing longer waiting times.

Following a review which looked at the current operational effectiveness of the service and considered key changes in the external landscape, this action plan sets out five changes.

1. A new model for a new context

FOS will move to a simpler, more empowered and accountable casework opening model. In particular it will consider how it can consolidate teams into a simpler and clearer structure, empower its casework leaders, improve triaging processes and case-routing, free up time and capacity, reshape management, and establish a clear workforce model.

To support its new model, it will consider building the capability within the organisation to support business. It will also consider recasting the training Academy output to align to specific areas and explore alternative models for the future of work.

2. Enhanced technology and digital capabilities

The review has endorsed the priorities in FOS’s existing digital and technology strategy – moving at pace to modernise, and to drive value.

As it moves forward FOS will develop a digital portal to make it easier and more efficient for customers to interact with them. It will also develop existing intelligence automation solutions and continue to improve its case management tool, Phoenix.

3. A renewed emphasis on communications, policy and engagement

The review found that many stakeholders – including industry and consumer groups – would welcome more engagement with FOS and improved public awareness of its service. It believes it should do more to promote its function and work.

Therefore, FOS will be building on its existing engagement and dialogue with the regulatory family and industry and consumer groups to collaborate further in solving problems together as efficiently as possible. Its intention is to take a more robust and proactive approach to preventing complaints and unfairness arising. To support all of this, FOS will look to make the most of its policy expertise from across the organisation.

4. A clearer, actionable and measurable strategy

FOS will set out a clearer and actionable strategy. The key themes will include how to:

Drive prevention with industry – using insights from timely case handling to prevent further harm to consumers
Measure and improve productivity and reduce the cost per case
Continue to build expertise across the organisation
Achieve and sustain steady state operation
Attract and retain the best talent

5. A financially stable future

FOS will consider revisions to the funding model to incentivise constructive behaviour in industry. It has also adjusted its reserve expenditure by freeing up funding from a six-month to three-month reserve.

Next steps

By April 2022, FOS will have: