Address by Professor John Pollaers OAM, and Chief Ombudsman and CEO David Locke – AFCA Annual General Meeting, 24 November 2022 

A recording of this speech can be found here. This speech should be read in conjunction with the recording. 

Chair’s address 

Good afternoon. I'm John Pollaers. As Chair of the Australian Financial Complaints Authority, I'm pleased to welcome you to this year’s Annual General Meeting. 

I'd like to begin by acknowledging the Traditional Owners on the Lands on which we meet today. I acknowledge the Wurundjeri People of the Eastern Kulin Nation and pay my respects to their Elders past, present and emerging, and to any First Nations Peoples joining us today. 

Over the last year, the financial services sector has experienced an extraordinary level of uncertainty. This has been driven by COVID-19 pandemic, interest rate rises, rapid inflation, climate-driven disasters, and new financial products and services. These factors have impacted consumers and small businesses and the types of complaints AFCA has received. 

Overview of complaints 

In 2021–22, AFCA received 72.358 complaints. It resolved 71,152 cases.  

At the end of June 2020, AFCA had 42,488 members. Around three-quarters were authorised credit representatives, while just over 10,000 were financial services providers. Most members did not have complaints made against them. In fact, only 16% received a complaint – the same as the previous financial year. 

It was pleasing to see complaints involving financial difficulty decreased from more than 5000, to 4442. This decline is consistent with last year, and shows the significant efforts made by members to work with their customers in response to the COVID-19 pandemic, and natural disasters. 

Scams and natural disasters 

While many businesses and consumers have benefited from digital services in the last 12 months, we've seen a concerning increase in the number of complaints involving scams. The impact on consumers and small businesses has been significant. This is evidenced by the ACCC report, which revealed Australians lost more than $2 billion in 2021. 

We've also seen an increase in the number of complaints relating to natural disasters, particularly severe weather events. In the last year, Australians experienced earthquakes, severe storms, and flooding. As a result, we've seen intense pressures placed on consumers and small businesses, many of whom experienced financial hardship. 

AFCA members also faced, and continue to face, complex challenges to support their customers. We know there are significant issues with the supply of building materials, parts and of labour, and this is resulting in more complaints. 

We want to better understand the cause of complaints. We continue to engage and work with industry to help resolve complaints faster, and ultimately reduce their number. 

We've seen a sudden increase in insurance complaints. In response, we've expanded our general insurance team. We've also activated our significant event response plan, giving priority to urgent financial complaints. AFCA will continue to work with stakeholders, to provide timely information and to support those affected. 

AFCA strategic plan 

To ensure AFCA remains current, and continues to build on its progress, we've set ourselves an ambitious program of work, outlined in the three-year Strategic Plan, 2021-24. This plan is designed to positively transform the way AFCA delivers its services. It has five strategic themes: customer service, efficiency, external engagement, data and technology, and people experience. 

AFCA’s vision is to be a world-class ombudsman service that not only resolves disputes effectively and efficiently, but also improves practices and minimises the number of complaints. 

We seek to meet diverse community needs, and to be trusted by all. David will share an update on this program of work later. 

Independent Review 

The Board and I welcomed the Independent Review of AFCA, which was conducted by the Commonwealth Treasury. This started in January 2021 and reported in November 2021. The review looked at whether AFCA is meeting its statutory objectives in a way that is fair, efficient, timely and independent. The report gave a positive assessment of AFCA’s service, and confirmed that AFCA is performing well, in a difficult operating environment. It also affirmed AFCA’s critical role in providing consumers and small businesses with access to out of court dispute resolution. 

The report made 14 recommendations and AFCA agreed, in principle, with all. We've designed a three-year program of work to manage the implementation of these recommendations.  

The AFCA Board looked in detail at the submissions made to the review, as we wanted to understand the views of both consumer and industry stakeholders. Our program aims to address the wider feedback received throughout the review. 

New AFCA Funding Model 

Since AFCA commenced, it was operating under an interim funding model. This was intended to remain in place for just three years. As a result, in early 2021, AFCA appointed PwC to undertake a review of the funding model and develop a new one that would be fit for purpose, sustainable and fair to all AFCA members.  

In developing the new model, we took member feedback into consideration, and considered the key findings of the Independent Review. We did this with a focus on a user pays approach that reduces the burden of our smaller members and those industries that are not heavy users of the service. We also wanted to minimise cross-subsidisation across sectors and support firms to better forecast complaints. 

We believe the new funding model that commenced from 1 July 2022 is fair, transparent, equitable and reduces financial impact to small members. 

IT and business transformation 

AFCA is also currently undertaking a major project to upgrade our IT systems. This will change the way that we do business. The upgrade will modernise our systems and provide a range of benefits, including a redesigned member portal and a new consumer portal. Both will be integrated with our new case management system. 

For members, we're focusing on making it easier to do business with us, assisting members to improve complaint handling and minimising disputes. 

Data and analytics 

AFCA is passionate about sharing data and insights with stakeholders. This year, we implemented our data and analytics initiative. Under the project, we applied predictive complaint forecast and triage models, we improved our forecasting, we removed waste inefficiency from the complaint handling processes, and this all helped to provide better, faster experiences for consumers and for our members. 

In 2021, we launched the member benchmarking dashboard. The dashboard was a significant milestone, and members have already told us how valuable it is in identifying improvements to their dispute resolution practices. This, in addition to the detailed interactive reporting that’s published every six months in the AFCA Datacube. 

We also introduced data governance and ethics frameworks for use of technologies, such as artificial intelligence, and to improve accuracy, quality and security of AFCA’s data. 

Over the coming year, AFCA will continue to focus on deeper, data-driven analysis, to provide a better experience for all members, consumers and small business. 

Awareness and accessibility 

AFCA has an obligation to ensure it is accessible to all, and that people are aware of our services. AFCA has developed a three-year strategy that builds awareness through a data-led, multi-channel approach, targeting those who are less likely to know about our services. This strategy aims to communicate information about our services to consumers, at the time they may need it. 

We've consulted with internal and external stakeholders to develop an accessibility framework. This is reinforced by existing customer experience principles, to embed accessibility into everything that we do. 

I'm particularly proud of AFCA’s efforts to deliver tailored resources to improve accessibility for community members who value a different approach. Soon, we will launch AFCA’s Reflect Reconciliation Action Plan. This will ensure strong support, awareness and commitment across the organisation, to deliver a culturally appropriate service for First Nations Peoples. 

The year ahead 

In the coming year, AFCA will continue to focus on delivering our strategic priorities. Our work towards implementing the recommendations of the Independent Review will continue. We will focus on complaint areas that have seen significant growth, including general insurance, claims delay, scams, and products such as crypto=currency and Buy Now, Pay Later. 

AFCA is ready to respond, should the Compensation Scheme of Last Resort Legislation be passed. AFCA has been asked to establish the CSLR entity and operations under its own independent Board, and we are well placed to meet this important milestone. 

Thank you 

I want to close by thanking AFCA’s people for their hard work over the past year. I'd also like to thank my Board, who provided invaluable expertise and support to AFCA’s leadership. 

During the year, we farewelled Johanna Turner and Alan Wayne. We thank them for their contributions. We welcome Gary Dransfield and Delia Rickard to the Board. I thank AFCA’s Chief Ombudsman and CEO, David Locke, and the management team, for their professionalism and their leadership. 

I'm delighted, as Chair, to support AFCA to deliver on its core purpose of providing fair and independent solutions for financial disputes. 

So I thank you, and I now welcome David Locke to make his address to the members. 

Chief Ombudsman and CEO Address 

Thank you very much, Chair. Good afternoon to everybody, and good morning, to those of you joining us from Western Australia online, as well. 

I'm David Locke. I'm the CEO and Chief Ombudsman at AFCA. I too, pay my respects to the Traditional Owners on the Lands on which we meet, and their Elders past, present and emerging, and I also pay my respects to any First Nations Peoples joining us today. 

On behalf of AFCA, I'm delighted to share with you an update on some of the things that we have accomplished in the Financial Year 2021-2022, and to outline our program of work for this year. 

We have implemented a series of initiatives to deliver the fastest pathway to resolution. We know, for members, the longer that a matter goes on, the more cost and the more stress that imposes. We also know, for consumers, that these matters can be difficult and stressful, as well. So, we are very focused on timeliness, and improving the experience that members have, but also consumers and small businesses who are using the service. 

The initiatives that we have developed include specialist teams; the use of merit assessments earlier in our process; enhanced exception reporting: prioritising aged files: and not just looking at the average time that matters take, but also looking at the outliers - the cases that are taking way too long - and trying to identify what may have caused that, and how we can do better. Also, how do we keep communicating to people throughout the process? How do we keep people informed? How do we ensure that members and consumers know what's going on? 

Customer service and member experience 

In addition to reducing the average time to resolve a complaint, we have made significant progress, and we have put a focus on, those small numbers of complaints that take over 12 months. We recognise that is a long period of time, and our aim is to be a much quicker process than the court system. 

I'm pleased to say that last year we managed to reduce the percentage of cases that were over 12 months, from 4% to 2.4%, and we're actually tracking below that at this point in this year. 

We know that the improvements we have put in place and are continuing to work on, will make a big difference to our members, and to consumers. We're committed to continuing this work and continuing to improve our service as we move forward. 

We do talk to members. We survey members and we survey customers, and I'm pleased to say that the metrics that we've got and the feedback that we've had has been positive. Customer satisfaction has increased in this year by 5%, to 70%, and overall member satisfaction slightly increased, reaching 77%. 

But we're not complacent about this. We want to ensure that all members and all consumers have a good experience and are positive about the work that AFCA is doing. 

Our aim is to increase both these results again, in the coming year. 

We have developed a dedicated membership team that assists AFCA members with the management of their membership. We have made some really positive strides in making it much easier to renew membership, and actually ensuring that where you do have queries as members, that we're getting back to you much more promptly, and able to resolve issues up front. 

This year we have introduced a series of amendments. The membership renewal process, which I've just talked about particularly improved matters for smaller members, and we've seen it's reduced the number of calls that members have had to make to us, as well. 

We know that fundamentally, what's most important to you is when you do have a complaint with us, what is the day-to-day experience? Can you rely upon us to ensure that we're treating you fairly, treating all the parties fairly, we're reaching fair decisions, and that the experience that you have, of coming through AFCA is a positive one? We're going to continue, over this year, with a focus on making it easier for you to do business with us. 


We do play a unique role in the financial services industry, and it's really important that we continue to develop strong relationships with all stakeholders, including those of you in different parts of the industry, who we may not meet that regularly, also, consumer groups, media, and others, who will be in touch with consumers more generally, as well. 

We believe that those relationships are important, not only so that we can get feedback and we can work to improve our services where necessary, but also because we want to influence better practice, as well. 

We want to use the experience that we have, from handling 70,000 plus complaints a year, to try and assist you with tools and with examples of good practice, to be able to, again, minimise issues arising in the first place, and when they do, to enable you to resolve them yourselves. It's much better, if you're able to resolve the matter, rather than it having to be escalated through to AFCA. 

We follow a robust engagement process, and that includes sharing of data and complaint insights, through forums. We have done some big forums this year: liaison meetings; one-to-one meetings; events and consultations; webinars. We do a monthly newsletter – if you're not a subscriber, we'd encourage you to subscribe to that, and we keep you up to date on what's going on – and also social media. We're engaged on social media and engaging with members throughout the year. 

Over the last 12 months, we've updated the Datacube, which contains all the data about complaints, on our website. We have made a number of submissions to Inquiries and Consultations. We have participated in a lot of industry and consumer forums right around the country, from the Kimberley down into Tasmania. 

Alongside the Insurance Council of Australia and also the major insurers, we have been out on the ground, and run 10 meetings, so far, for storm-impacted communities. We know, when people are impacted by the floods - and that may be businesses, that may be individuals – that actually getting out there, finding out what's going on, on the ground, working with the insurers and working with people impacted, to try and resolve these matters as quickly as possible, is a real priority and we're passionate about continuing to do that work. 

We recognise the importance of being able to provide face-to-face advice, when people are impacted by these appalling natural disasters that we've seen, sadly, too many of this year. 

We continue our liaison with consumer advisory panel, consumer advocates, so, we're dealing, very often, with people such as financial counsellors, such as legal aid providers, such as law centres, who are on the ground, seeing people, as well, who've got pressing issues, and also listening to the representations that they make. 

We also hold similar meetings with members through our industry liaison groups. We have had two virtual member forums, and we do a main event, but we also do separate events – separate events for insurers, separate events for banks and credit providers, separate events for investment advice for superannuation. These have been well attended. We've had 4000 members at each of these two forums throughout the year, as well. 

They really do enable the decision makers, the ombudsmen, the adjudicators, senior staff, to share complaint trends, to talk about the issues that we're seeing with cases. We really do think that some of this knowledge and some of this information can help members with their complaint-handling practices – and that's really what our purpose is. 

In addition to those two big forums, we held seven webinars throughout the year, including a session on the ASIC Regulatory Guide 271, the guide that ASIC produce that governs how you need to run your internal dispute resolution processes. We ran a session on that was co-hosted with ASIC. We have run other sessions, including how to handle complaints where there may be really stressed consumers or really polarised positions, as well. 

So, we're constantly looking, and we're really open to any feedback you have, on other webinars that we could run that would be helpful, as well. 

Systemic issues 

I'd really like to thank all stakeholders who we've worked with this year. As well as handling the complaints that come to us - as you’ve heard, we've handled over 71,000 complaints this year - we have identified and reported 67 definite systemic issues and 23 serious contraventions of the law, through to the regulators, as well.  

This is part of our role. This is something that we're required to do, under our constitution. But we're looking to how can we do the systemic issues work more effectively, so we are undergoing a transformation project here, which is a three-year initiative, looking at how we can better identify where there may be systemic issues using data and analytics. That isn't necessarily about an individual financial firm. It may be around a product and how that's playing out, right across the sector. 

Our culture story 

In April we launched our culture story, which is really about defining for our people what the culture of AFCA is going to be. As you know, dealing with any organisation, the culture of the place does impact what your experience is, as a member or a consumer, as well. 

We have prioritised a people for purpose culture, recognising that our role is to work with members, our role is to work with consumers, often in conflict, and we need to do that in a clear, empathetic way, that understands where each party is coming from, and provides appropriate support. 

Understanding our current culture and identifying how we are going to develop is critical to us becoming the world-class ombudsman service that our Chair has talked about. 

We're fortunate to have a workforce – people that bring a range of skills and technical experiences, as well as having people from diverse backgrounds, and varied life experiences. When you look at the demographics of our workforce, whether that's by age, whether that's by male or female gender, whether that's by background, then you find that we are quite representative of the broader community. That's important, because we want to have a workforce of people with different experiences, different lived experiences, that will bring diversity of thought, and that will enable us to provide the best service we can to all members, as well. 

Culture defines and drives engagement. I'm particularly proud of the AFCA staff survey engagement results, which found that 90% of our people are proud to work at AFCA and 82% of our people think AFCA is a truly great place to work. 

This is important, because if you're dealing with an organisation where people don’t want to be there, or don’t feel happy, or don’t feel engaged, then again, we're not going to be able to provide a good quality member experience or customer experience. 

We want to harness that engagement, drive a culture that promotes effectiveness, as well. We have got to provide value for money to members. We have got to deliver more efficient services, and we need to look to do this in innovative ways, not just keep repeating the same processes. 

Commitment to diversity and inclusion 

We are committed to providing a service that is accessible to everyone. We are focusing this year also on vulnerable and disadvantaged people and making sure that they can readily access our service. 

Our accessibility and inclusion network sees over 40 AFCA people driving innovations across the organisation, to achieve continuous improvement in this area. We are doing work around mental health, we are doing work around Reconciliation, work around pride, as well. 

The network is sponsored by our deputy chief ombudsman, Dr June Smith, and governed by a council of senior people, who bring a strategic lens to these initiatives and activities. 

Our network groups proactively identify ways to increase accessibility to our service, and consider our internal practices, as well, to ensure that we have the appropriate culture. 

In the last year, the mental health group conducted over 50 in-depth interviews across AFCA, to research and document our people’s observation of working with customers who have experienced stress, anxiety, panic attacks, post-traumatic stress disorder and a range of mental health conditions. 

If you are dealing with people, for example, who have just lost everything in the floods, if you are dealing with people who are coping with a terminal illness, and then are trying to handle, for example, a life insurance complaint on the top of that, if you are dealing with members for whom their business is in financial difficulty, as well, and they're having to handle complaints; all these things compound stress, compound pressure on people, and we need to be able to understand where people are coming from, and provide appropriate services, whether that's to consumers or members. 

I'm confident that the work that we are doing and the proactive plan of action that we have will assist us to provide better services for all. 

Our Reflect Reconciliation Action Plan 

AFCA’s reconciliation group was formed in 2021, to create our first Reconciliation Action Plan. Our Reflect RAP was submitted to Reconciliation Australia to begin the endorsement process. We will be launching our Reflect action plan by the end of this year. 

Reflection is necessary for growth. This work demonstrates our commitment to all people having and creating an environment that supports greater economic and financial participation inclusion for First Nations Peoples, as well as for everybody else. 

We're embracing the RAP journey with open hearts and minds, and we recognise and are guided by the knowledge, wisdom and longevity of First Nations cultures, as we grow from this experience. 

Thank you 

I would like to thank AFCA’s Chair. I would like to thank the Board, for their diligent, wise and valued governance of AFCA. They push us, as they should, and really hold us to scrutiny for the work that we are doing and are constantly focused on how we can improve our services to members and consumers. We are passionate about doing it even better this year. 

Finally, I would like to thank all of AFCA’s staff for their hard work, for their professionalism over the last year. I look forward to continuing our work in this year, 2022– 2023. 

Thank you. 

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