Chief ombud on the way for financial services sector
The new Twin Peaks legislation will put a new “chief ombud” in place for SA’s financial services sector, making for a more harmonised and consistent approach to adjudicating customer complaints.
This was the word from Kershia Singh of the Treasury’s tax and financial sector policy unit, who briefed a range of ombud and complaints people at the launch of the annual report of the Ombudsman for Banking Services on Wednesday.
The report showed that complaints related to ATMs continued to top the list and internet banking cases accounted for 20% of the caseload, with cellphone phishing a major culprit, reflecting the fact that more customers now bank on their cellphones. The banking ombud’s office opened 5,219 cases during 2016, a 4% increase over the previous year, and cut the average time it took to close cases.
The banking ombud is one of several in the sector that arbitrate and resolve disputes between financial institutions and their customers — including statutory entities such as the Fais ombud, National Credit Regulator and Pension Fund Adjudicator — as well as voluntary schemes such as the ombuds for banking, short-term insurance and long-term insurance, which are funded by their member institutions.
The new Twin Peaks legislation — the 270-page Financial Sector Regulation Bill — was passed by the National Assembly in December and is being processed by the National Council of Provinces select committee on finance.
The legislation will establish a prudential regulator housed in the Reserve Bank for banks, insurers and other financial institutions, and a market conduct regulator to replace the Financial Services Board.
Singh said parliamentarians had shown a high level of interest in chapter 14 of the bill, with the ombuds offices seen as having a vital role in upholding customer rights and dealing with customers directly.
The new chief ombud could set rules for the ombuds, which would report to it, and it would help to promote the offices and facilitate access by customers. The legislation obliges financial institutions to be members of the relevant ombud.
Chairman of the Ombudsman for Banking Services John Myburgh said the banking sector in SA could not afford to be complacent in its product offering, service standards, or the treatment of customers.
The Reserve Bank had for the first time in 11 years granted three provisional banking licences in 2016 — to the Post Bank, Discovery Bank and branchless bank, TYME.