The Ombud Council’s Annual Report for 2024/25 provides a comprehensive overview of the Council’s achievements, strategic priorities, and operational highlights. This article summarises the key points, offering practical insights for financial institutions.
Strategic priorities and achievements
The Ombud Council’s mandate is to ensure an accessible, effective, independent, and fair financial sector ombud system. The Council’s strategic priorities for 2024/25 included building a well-governed institution, supporting financial inclusion, enhancing ombud system coverage, and contributing to regulatory reforms.
1. Operational Independence: The Ombud Council achieved operational independence from the Financial Sector Conduct Authority (FSCA) in 2024/25, finalising its own financial, supply chain, and human resources policies. This transition was marked by the successful implementation of internal audit functions and the achievement of a clean audit opinion for the financial year.
2. Consumer Awareness Initiatives: The Council made significant strides in promoting consumer awareness of the ombud system. This included a multi-phase, multi-media advertising campaign, participation in Money Smart Week South Africa, and collaboration with the FSCA and other stakeholders. These efforts aimed to enhance financial literacy and support financial inclusion.
3. Ombud System Reform: The Council actively contributed to the structural and policy reforms of the financial sector ombud system. A highlight was the first anniversary of the National Financial Ombud (NFO), which replaced four industry ombud schemes. The Council also worked closely with the National Treasury, FSCA, and World Bank to develop new legislative proposals to strengthen the ombud system.
Key takeaways for financial institutions
- Enhanced Consumer Protection: The Ombud Council’s efforts to streamline and strengthen the ombud system directly benefit financial institutions by ensuring a more transparent and efficient dispute resolution process. This enhances consumer trust and confidence in financial services.
- Regulatory Compliance: Financial institutions must stay informed about the ongoing regulatory reforms and the new legislative proposals developed in collaboration with the Ombud Council. Compliance with these regulations is crucial for maintaining operational integrity and avoiding potential penalties.
- Consumer Education: Financial institutions can leverage the Ombud Council’s consumer awareness initiatives to educate their customers about the ombud system. This not only supports financial literacy but also helps in managing customer expectations and reducing complaint volumes.
Good to Know
The Ombud Council conducted four on-site inspections of ombud schemes during the year, ensuring compliance and performance monitoring. Financial institutions should be prepared for such inspections and maintain robust internal controls to meet regulatory standards. The Council finalised a comprehensive complaint data reporting framework, setting consistent and comparable reporting requirements across ombud schemes. Financial institutions must ensure accurate and timely reporting of complaint data to comply with these requirements.
The Ombud Council’s new five-year Strategic Plan for 2025-2030 focuses on consumer education and awareness while continuing to fulfil its mandate.
The Ombud Council’s Annual Report 2024/25 highlights significant achievements and strategic priorities that directly impact financial institutions. By staying informed and aligning with the Council’s initiatives, financial institutions can enhance consumer trust, ensure regulatory compliance, and contribute to a more robust financial sector.