Keynote address by Chief Ombudsman and CEO David Locke

Acknowledgement of Country

I’m David Locke and I am the CEO and Chief Ombudsman at AFCA.

I would like to begin by acknowledging the Traditional Custodians of the lands on which we are meeting today, and pay my respects to Elders past, present and future – for they hold the songlines, the stories, the traditions, the culture, and the hopes of First Nations Australia.

This land is, was, and always will be traditional First Nations country.

I also acknowledge and pay my respect to the Traditional Custodians of the lands on which AFCA works:

• the Wurundjeri people of the Kulin nation and
• the Gadigal people of the Eora Nation, and
• to any First Nations people with us today.

Welcome

Welcome, again, to our Member Forum.

For any new members, or others who are joining us for the first time, we hold Member Forums twice a year. They provide you with the opportunity to directly hear from senior leaders and decision makers at AFCA about what we have achieved, the complaints we’re seeing, emerging issues and ways we can work together to achieve better outcomes for you and your customers. Our Member Forums are also a way to update you on the work that we have been doing and what’s next on our priorities.

Whether you choose to attend one or all our sessions, I hope you find the information and discussions useful.

AFCA’s strategy

Looking back on the year so far, it has undoubtedly been a period of change and growth at AFCA.

In June, we completed our IT transformation project with the launch of three new, integrated systems – a case management system, an enhanced member portal and for the first time a consumer complaints portal.

We made significant strides in delivering on the recommendations made by Treasury in its Independent Review of AFCA, and they are complete.

Deputy Chief Ombudsman, Dr June Smith, will talk in more detail about both these initiatives.

We continued to see an increase in complaints coming to AFCA, with complaints rising above 100,000 in one year for the first time.

And we concluded AFCA’s first ever three-year Strategic Plan, which centred around the vision of becoming a world class ombudsman service.

Thanks to the tremendous contribution of our people, our Board, and continued engagement with you, our members, I believe we have achieved that vision, and clearly established AFCA as a world-leading dispute resolution body.

AFCA’s next three-year strategy

As we reflect on AFCA’s role in the financial services industry and look ahead to what we can bring in the future, I’m pleased to share with you our new vision: Towards an Australia free from financial disputes.

It is a bold vision, and we cannot do it alone. We all have our part to play, including you.

Through sharing our data and insights, we want to work with you to improve practices, so that you can have less complaints to start with. And, when complaints do arise, they are resolved effectively through your Internal Dispute Resolution process so that we see less complaints coming to AFCA altogether. I have said before that responsibility for handling your customers’ complaints sits with you, our members.

Our new vision will guide our actions in how we resolve disputes, to improve the financial services industry for all.

To help us achieve our vision, we have set out four key priorities which will guide our work over the next three years:

Our first priority is Equity of access – This is about ensuring AFCA’s service is accessible to all, and that anyone who comes to AFCA is treated with respect, no matter their background or needs. It’s about identifying and removing barriers to our service, being culturally competent and tailoring our service to the people needing our help. And this must include First Nations and Torres Strait Islander communities as we continue on our path of Reconciliation as an organisation.

Our second priority is service excellence – We want to provide a fair, high quality, consistent and timely service to our customers and members. High complaint inflows have caused delay in our service, and this priority is about applying innovative solutions to reduce wait times and bring efficiency to our service. We also want to look at the quality of our work, ensuring consistency and fairness in every decision we make.

Our third priority is influence – As I said, we want to reduce financial disputes and drive improvements in the financial services sector. To do this, we will leverage our data to deliver insights to members and other stakeholders that can influence behavioural change in the industry. Influence is about ensuring we engage well with all our stakeholders. We will be looking to partner with you to communicate effectively and drive transparency and best practice in the industry.

And finally, Expertise – This is about equipping our people with the right skills and capabilities so that we can deliver our program of work. It’s about having the right training and support in place, not only technical skills but other critical skills: to build cultural competency, improve communication and draw on the lived experience of our workforce, so that we approach each complaint with empathy and respect.

New single EDR scheme for scams

In sharing AFCA’s strategic direction for the next three years, It would be remiss of me not to mention the Australian Government’s recent announcement to establish a national Scams Prevention Framework and their intention to prescribe AFCA as the external dispute resolution scheme by which consumers seek help when they have fallen victim to a scam.

We welcome the Government’s action to address the immense harm caused by scams, and to fill gaps in the law that make it hard for those affected by scams to access proper redress.

In our work, as in yours, we see first-hand the devastating impact of scams.

In 2023-24, AFCA received approximately 11,000 scam-related complaints – more than 900 a month, and we know that is the tip of the iceberg.

The Government’s draft legislation proposes a whole-of-ecosystem response to scams. This means financial firms, telecommunications companies and digital platforms will be covered by this new EDR scheme.

This legislation will set in motion a program of work for AFCA to establish this new service. It will mean busy days ahead for AFCA. But as an experienced EDR scheme that currently investigates and resolves scam complaints in the financial services sector, we are well-positioned to successfully deliver on this work, not only helping victims of scams but also supporting you to improve practices through data and insights and together making Australia a destination of last resort for scammers.

We believe both consumers and firms will benefit from having mandated internal dispute resolution mechanisms, where none currently exist, as well as access to a single ‘front door’ for external dispute resolution, where a complaint remains unresolved.

We look forward to working with the Government, regulators, the Telecommunications Industry Ombudsman (TIO), relevant industries, consumer advocates and the community, as this important work progresses.

You can be assured that we will keep you informed of any impact this work will have on our members.

Working with members – the next 12 months

With all this in mind, how can we best work together in the next 12 months? I’m looking forward to continued constructive engagement between AFCA and our members, to see complaint trends go down.

Improving responses to financial hardship

AFCA would like to see real ownership taken by financial firms to support customers experiencing financial hardship.

ASIC’s recent hardship report identified significant challenges for people in accessing financial assistance and revealed that a third of hardship applicants faced so many obstacles that they abandoned their applications altogether.

We see this in our own complaints data, which shows insufficient support by industry for many individuals in financial difficulty. Complaints in this area were up 18% last financial year, with a substantial proportion relating to home loans.

It is positive to see some steps lenders have taken, such as investing in specialist hardship teams and improving processes. But the increased number of complaints suggests more needs to be done.

Addressing general insurance delays

We continue to look to the general insurance sector to get on top of delays in claims handling. AFCA has been actively engaging the Insurance Council of Australia (ICA) and individual insurers to address the factors driving the high volumes of general insurance complaints. Some insurers have made progress. But for many, we have yet to see significant progress towards sustained improvements.

Over the past two years, consumers have faced a record level of premium growth in both car and home insurance. Despite this, we remain disappointed with the lack of action regarding appropriate resourcing, product design, and the adoption of a resolution mindset.

Using AFCA’s data and insights

Lastly, we want to see financial firms use AFCA’s data and insights to drive real improvements and change in their practice. Our work, by nature, generates a rich set of data about the issues, types and outcomes of financial complaints. We make an effort to share these insights with our members.

Our Member Benchmarking Dashboard is available to all members through the member portal and allows you to not just analyse data about your complaints but also to compare your performance to an anonymised group of similar firms.

We are also close to publishing the next six-monthly update to the AFCA Datacube which is a publicly available database covering firms with four or more complaints in each period. The data gives members a statistical understanding of how you compare within your industry. And it helps consumers and small businesses make informed choices when deciding on financial products and services. The next update will include complaints received from 1 January to 30 June 2024, and will be available from early November.

We are working on enhancing the Datacube to support even better performance comparison and help you visualise complaint trends.

If you aren’t familiar with these tools, I encourage you to explore the member page on AFCA’s website which has a range of resources to help you get started.

Closing remarks

As we embark on the next phase of AFCA’s role and maturity as Australia’s financial ombudsman, we want to see members right there with us, taking the lead in improving standards and practices, mitigating consumer harm and building trust.

With so much on the horizon, we are looking to members for your continued support and engagement, and to do your part as we work towards an Australia free from financial disputes, together.

That brings me to the end of my presentation today. 

Thank you for joining me this morning. I will now pass you to Dr June Smith.