We often find ourselves explaining to people who aren't familiar with the ombudsman that "we're not the regulator". The difference between our job and the regulator's is very clear. We're part of the statutory arrangements designed to help underpin consumer confidence in financial services. But unlike a regulator, we don't fine or discipline financial businesses. And unlike a regulator, our role is to resolve individual disputes - as a quicker and more informal alternative to the courts.
Although our roles are distinct, our interests are aligned. At the ombudsman service, we respond to over two million enquiries a year - ranging from initial queries to drawn-out, contentious disputes. We talk to consumers and businesses daily - so we see a lot at first hand. And we tend to notice very quickly if there's a widespread problem. By sharing what we see in the enquiries and complaints we receive, we can help prevent future problems - and that means we need to work closely with the regulator.
It's true that no regulator can deliver a "zero-failure" regime. But like everyone else, they can learn from experience. It's now widely acknowledged that many of the problems we have seen in financial services were caused partly by light-touch regulation in the past. And it's also widely agreed that the extent of PPI mis-selling was exacerbated by the regulator failing to act quickly and decisively when the problems first came to light.
The new regulatory framework for financial services came into being on 1 April this year - and was explicitly designed to address some of these challenges. The FCA's chief executive, Martin Wheatley, recently said that he wants the FCA "to use its new powers and remit to bring a more human face to the regulation of financial services. A more pragmatic, sophisticated approach to regulation."
This is a welcome shift - and a timely reminder of the need to balance legitimate business interest with fairness and good customer service.
But it's also welcome because our own approach to resolving problems on the frontline is rooted very firmly in pragmatism. We make decisions by considering what is fair and reasonable in the individual circumstances of each case. And we often find that problems have escalated unnecessarily where businesses haven't been pragmatic in the way that they have applied the rules.
Ultimately, regulation will be increasingly effective if it takes account of how things are playing out in real life. So a more pragmatic, commonsense approach can only be good news - and we look forward to working closely with the FCA as it implements its new approach to regulation.
And while things are changing at the regulatory level, it's business as usual at the ombudsman service. In our own work, we will continue to emphasise the importance of dealing with customers fairly - and of balancing the needs and expectations of both sides in a dispute. As an organisation that affects lives, livelihoods and reputations, we need to concentrate on making sure we're there when people and businesses need us. That's ultimately what we're here for.
So as the spirit of regulation shifts towards balance, fairness and customer service, our work on the frontline - and the insight that brings - feels more relevant than ever.
chief executive and chief ombudsman
ombudsman news gives general information on the position at the date of publication. It is not a definitive statement of the law, our approach or our procedure.
The illustrative case studies are based broadly on real-life cases, but are not precedents. Individual cases are decided on their own facts.