Create SA National Financial Ombud, urges World Bank study
A diagnostic study on South Africa's ombud system recommends that a National Financial Ombud be established, replacing the current seven schemes, bar retirement funds.
The study, "South Africa - Financial Ombud System Diagnostic", was commissioned by National Treasury and prepared by the World Bank Group. The Financial Sector Conduct Authority, responsible for ensuring consumers of the financial sector are treated fairly, also participated in the process. The public can now comment on the study, which recommends reforms for the financial services sector in the interests of consumers.
The diagnostic study identified potential overlaps, gaps and inconsistencies both in the overall financial ombud system and individual ombud schemes, and recommends further reforms.
The study's analysis and recommendations as well as the public comments received will help shape and inform National Treasury’s policy approach to reforming the financial ombud system. "The report acknowledges the many strengths and benefits of the current ombud schemes but findings point to the need for a centralised and comprehensive ombud system that supports greater accessibility and efficiency across the financial sector," Treasury said in a statement.
Among the key findings is that the current ombud system is "highly complex and fragmented", which is difficult for consumers to navigate and there are overlaps in schemes which increases costs.
Other issues include "insufficient customer accessibility" linked to language barriers and regional distribution. Notably the lack of socio-economic data on complainants makes it difficult to identify and address systemic issues, Treasury said.
The study also recommends that proposed reformed Pension Funds Adjudicator becomes the Retirement Funds Ombud. Other recommendations include implementing an update of complaint-handling requirements to improve consistency among financial services providers.
Public comments can be submitted to Treasury at firstname.lastname@example.org before September 3, 2021.