photo: Natalie Ceeney, chief ombudsman
1 April 2011 to 31 March 2012
It’s now two years since I joined the ombudsman service – and I can report on another busy year. Our ambition is to provide a truly first-rate service when compared with customer-service standards in any sector. So as well as dealing with record numbers of individual complaints over the past year, I’m pleased that we have made significant progress in developing the service we offer to all of our customers.
At the start of the financial year, in April 2011, we set out five priorities for our service, which provide a useful framework for reporting on the work we have done this year – and which we plan to do more of in the year ahead.
At the heart of our model is the issue of “trust”. By the time a consumer reaches us, they have already raised a complaint directly with a financial services business and have had that complaint rejected. So it’s crucial that consumers trust us to be fair and impartial in the way we handle and resolve their dispute – and we monitor this through our customer research.
Over the past year – while trust in many national institutions has been in decline – we have maintained the general level of trust that people have in the ombudsman, with seven out of ten people saying they would trust us if they had a complaint. I’m especially pleased that consumers who have actually used our service trust us even more – with 63% of these people now saying they trust us completely, up from 50% in the previous year. The proportion of people who say they would recommend our service to friends and family has increased over the year as well – from 74% to 77%.
During the year we have also significantly strengthened our accessibility. Given the current tough economic times – and the extent of financial hardship now affecting all kinds of people – it’s even more vital than ever that our service should be open and available for everyone. So we have developed proactive partnerships with front-line advice agencies across the UK – and have worked collaboratively with consumer groups and stakeholders to make our service easier to use.
As a result of this work, we have seen the demographic profile of our customers shift – with significantly more consumers from “DE” (unskilled) backgrounds using our service than ever before. For example, the proportion of people in so-called “elementary” occupations – including restaurant, bar and hotel workers – who referred complaints to us during the year increased from 3% to 10%. And readers of the Financial Times and The Star now refer equal numbers of complaints to us.
Of course, it’s also essential that the financial businesses we work with trust our decision making. We have developed a new framework for measuring quality, more than doubled the number of ombudsmen we employ, and developed a new training approach – which includes a three-month “academy” for all newly-recruited adjudicators and an externally accredited training-programme for our case-handling staff, as they develop from the role of adjudicator through to ombudsman.
We know that by providing consistent decisions on similar issues we will help businesses improve their complaint handling, as well as deliver a fair and just process for consumers and businesses alike.
The impact of harder times – with family finances and job security coming under more pressure than ever – means it’s likely that the need for our service will only increase. This is why a priority for the coming year is to continue to build trust in what we do – and to widen and deepen awareness and use of our service across all sections of the community.
Our work in resolving disputes has a significantly greater impact if the lessons learned can be fed back to prevent future problems. This is why we have continued our work during the year to make the activities and decisions of the ombudsman service even more open and transparent.
We came under the Freedom of Information Act in November 2011. We have also completed a consultation with stakeholders on our proposals for publishing ombudsman decisions (with information about consumers kept confidential) – in order to be ready to implement the new approach in 2013, once the relevant legislation is in force. Publishing ombudsman decisions builds on our existing commitment to openness and transparency, both in terms of the way we manage our corporate governance and in terms of our general approach to handling cases.
We have also invested significant time in helping financial businesses learn from what we see, focusing our effort where feedback is most needed. Ten financial services groups account for three quarters of the complaints we receive. And this is where we have invested most time over the year.
However, we also support smaller businesses and advice agencies in learning from what we do – through events and outreach, information and publications, and our technical advice desk. This will remain a key area of our focus going forward.
Our relationship with the regulators is, of course, crucially important. We continue to have close dialogue with the Financial Services Authority (FSA) and the Office of Fair Trading (OFT) – both through the formal joint “co-ordination committee” as well as on specific issues, where the insight we have from cases is of use to the regulator.
Over the coming year, we will be putting significant focus on developing a similarly close and effective working relationship with the proposed new Financial Conduct Authority (FCA).
Professionalism should be at the heart of everything we do at the ombudsman service – and this depends on our people having the right knowledge and expertise to do their work to the highest standards.
To promote and encourage professionalism across the service, we introduced a range of measures over the year to make sure our values are central to everything we do. Our values are at the core of our approach to recruiting, training and developing our people. During the year we launched our new professional career structure, strengthened our arrangements for continuing professional development, and reinforced our commitment to professional leadership by our ombudsmen.
The substantial investment we have made in increasing the number of our ombudsmen is crucial to the success of this work – ensuring that our ombudsmen are actively involved in the development of our people and our case handling. By doing this, we will continue to ensure that quality and consistency remain at the heart of our work, as we face the challenges of a caseload that continues to grow and change significantly.
We were especially pleased to be accredited in the Best Companies survey in January 2012. Given the scale and scope of the ombudsman service – and the changes we are going through – high levels of staff engagement, coupled with a commitment to grow and develop our knowledge, are crucial to our future.
The challenge of meeting service standards that would be seen as excellent in any sector is made more difficult to deliver by the increased volatility of our caseload, the rising volumes of complaints about mis-sold payment protection insurance (PPI), and the growing complexity of the disputes referred to us.
To help us cut the time it takes to resolve cases, we have carried out “lean” process improvement of our case-handling systems – and we will be further developing this work in 2012/2013. Our recruitment of more ombudsmen during the year is already reducing the waiting time at the final decision stage of our process. As we recruit additional ombudsmen over the coming year, we expect more cases to be settled sooner.
We have also reviewed our costs and “operating model”, in order to be more efficient and better able to cope with volatile levels of cases. The National Audit Office (NAO) carried out a six-month assessment of our efficiency – at the invitation of our non-executive board – and concluded that the volatility of our workload, and the behaviour of businesses and consumers in the complaints process, were the biggest challenges for us.
The NAO also concluded that our “change programme” – introduced in 2010 to modernise operational processes and IT (including the “e-enablement” project) – has already begun to realise benefits, and is being managed well with good progress made to date.
During the year we expanded our PPI complaints-handling capacity in response to the volumes of current and expected new cases. Our plan is to double the number of our case-handling staff by the autumn of 2012. This expanded resource will help us manage the volatilities in our workload more effectively in 2012/2013 and beyond – as well as helping us deal with the rising volumes of PPI complaints now heading our way.
Our ability to settle complaints efficiently depends on a wide range of factors including – in each individual case – the extent of the factual issues that are in dispute, the complexity of the technical questions, the strength of the legal arguments, and the willingness or otherwise of the parties involved to co-operate.
As times get tougher with the current economic environment, we are seeing more disputes involving hard-fought arguments and entrenched attitudes – with businesses becoming less willing to concede and consumers becoming more demanding. This makes the complaints more difficult to resolve – which in turn affects our efficiency and productivity.
The ombudsman service is not funded by the taxpayer but by the financial businesses that consumers complain about. We are as mindful as any business of the importance of controlling costs and providing good value for money – even more so at a time when everyone is feeling the pinch and tightening belts.
During 2011/2012 we delivered our programme to reduce our underlying costs by 10% – and we built up capability in our finance and procurement functions, to enable us to continue to scrutinise and control our costs. At the same time, we have invested in a “continuous improvement” programme, so that we can look constantly for ways of making our service better for our customers – as well as lower-cost – using the insight and expertise of our own people.
These programmes and initiatives have resulted in our ending the financial year 2011/2012 within budget – despite the considerable pressures of a substantially increased and volatile workload. We have also been able to freeze our levy and case fees for 2012/2013 – for the third year running – other than a new fee specifically to cover the costs of scaling-up our service to deal with the rising volumes of PPI mis-selling complaints. This fee will be paid only by those businesses with more than 25 PPI cases a year.
As my final thought, I’d like to return to our most important “asset” at the ombudsman service – our staff. The board, the executive and I rely not only on the professionalism and expertise of all our people here – but also on their hard work, enthusiasm and commitment. It’s the teamwork, solidarity and shared sense of purpose that help to make the ombudsman service such a remarkable place to work.
This is why the deaths during the year of three members of our staff have had such a profound effect across the service. Tufail Malik, Jonathan Baxter and David Horton are sadly missed by their colleagues here. This annual review – and the achievements it records – is for Malik, Jonathan and David, and for their teams and colleagues, and for everyone whose lives they have touched both in and outside work.
For surely, to be able to touch lives and make a real difference is what life is all about. The ombudsman service plays just a very small part in that.
Natalie Ceeney CBE