Address by Professor John Pollaers OAM, and Chief Ombudsman and CEO David Locke – AFCA Annual General Meeting, 23 November 2023

A recording of the 2023 AFCA AGM can be found here. This speech should be read in conjunction with the recording. 

Chair's address

On behalf of AFCA, I thank you for attending our 2023 Annual General Meeting. 

It has been a landmark year for AFCA and the financial services industry. We saw a record number of complaints. These were driven largely by delays in insurance claim handling, mounting financial pressures on consumers, and the ongoing impact of serious financial scams. 

We also saw the introduction of significant consumer protections such as the Australian Government’s move to regulate Buy Now Pay Later; an overhaul of laws to govern “payday” lending; and the establishment of the National Anti-Scam Centre. 

In June, we were delighted to welcome the passage of legislation that established the Compensation Scheme of Last Resort. 

The CSLR was a recommendation of the Hayne Royal Commission. It is a scheme AFCA and our predecessors have consistently advocated for, and we look forward to its implementation. The scheme will not only strengthen protections for consumers, but will build trust in our financial services sector and dispute resolution system. 


As I mentioned, we saw a record number of complaints to AFCA this year, a total of 96,987. We resolved 86,185 complaints. And awarded $253.8 million in compensation to consumers and small businesses. 

We also identified more than 1,000 potential systemic issues and reported 105 systemic issues to federal regulators, delivering an additional $100 million in refunds to 378,830 consumers.

There was a 50% increase in general insurance complaints to AFCA this year. We believe many of these cases could have been resolved before they reached EDR. Insurance complaints progressing to our Case Management stage grew by 52%, meaning more of these complaints required an AFCA investigation.

We acknowledge that external pressures, such as flooding events, supply chain problems and labour shortages, have played a role here. However, such consistent influx points to broader systemic challenges. Most of these complaints were not directly linked to natural disasters.

Insurers must strike a balance between unforeseen challenges to daily operations and the way they deal with customers. We urge the insurance sector to do more, by improving both their IDR practices and customer communications.

To help us cope with the increased complaint volumes, we made strategic changes this year. This included enhancing our technology and reallocating resources. We now group similar complaints and have improved how we assign unresolved complaints to case workers. We also introduced proactive ways to update consumers on their complaint's progress. Our team's dedication and these improvements have seen average resolution times drop to 69 days. This is slightly better than 72 days last year. Aged cases also declined slightly to less than one percent.  

While we have made some headway to improve timelines, the large increase in complaints has nevertheless put significant pressure on our resources. We know many complainants are still experiencing delays. We continue to monitor complaint queues closely, as we investigate and implement new initiatives to support early resolution.

This year, we had more complaints about personal transaction accounts than credit cards. This was a significant shift as credit cards have been the most common complaint product since AFCA commenced.  The change was influenced, in part, by a 46% rise in financial scam related complaints. These now average more than 500 a month, 6,048 for the year, and continue to become more common.

The distress caused by financial scams is something we witness daily. Whilst some banks have taken positive steps to protect consumers, not enough is being done to date. There is no consistent approach.  Consumers continue to bear the bulk of the losses from these crimes. However, the level of their sophistication and complexity makes it very difficult for people to protect themselves. 

We applaud the Government's initiative in setting up the National Anti-Scam Centre. We support strong mandatory and enforceable codes for banks, telecommunications companies and digital platforms.  We also believe that a code governing superannuation funds is necessary. There is a pressing need for strong, uniform protections for consumers.

We saw a significant rise in complaints caused by financial stress in the last few months of the year. This was caused largely by rising interest rates and increased living costs. While the number of hardship complaints grew by just 9% for the year, these complaints were in fact up 31% in the last quarter.

Home loan, credit card and Buy Now Pay Later complaints also spiked toward the end of the year. People continue to seek alternative lines of credit to navigate stretched budgets and we see this in our complaints. We urge banks and other credit institutions to remain proactive in identifying and assisting customers in financial strain. We are pleased to see the banking sector continue to resolve their complaints early, despite increased volumes.  

Engaging with industry and other stakeholders

As many of our members know, it is part of AFCA’s vision to improve practices and minimise disputes. 

AFCA is deeply committed to sharing insights and data to help achieve this. Building and maintaining meaningful relationships with our partners is critical to this vision. It not only ensures we can encourage better practices, but it helps inform positive changes.

We interact both with our direct stakeholders, and others in different industries and across international borders. This includes exchanging experiences to fortify Australia's EDR framework and engaging with other ombudsman schemes.

Our commitment is evident in our regular interactions with the Boards of other institutions. Through these conversations, we can share observations and discuss challenges like scams and rising complaints. This extends to co-chairing important industry discussions. For instance, we co-hosted a roundtable with the Insurance Council of Australia this year. Senior leaders of insurers and representatives from ASIC and APRA joined us to discuss surging insurance complaints. Together, we can find sustainable solutions. 

We also connected with ombudsman schemes across the world this year, including from the UK, Singapore, South Africa and Canada. We did so, in part, to gain insights into their IT transformations. We want to know best practices that we can apply. We also focused on the rising issue of scams to deepen our understanding of this issue. And we shared AFCA’s story with overseas ombudsman schemes. Our CEO, David Locke, addressed the Reserve Bank of India's Ombudsman Conference in Jodhpur last October. AFCA also met with the Central Bank of Uzbekistan, which is considering establishing its own financial ombudsman scheme. We proudly share the story of AFCA's inception and operational model. 

Over the year, AFCA shared complaints data and insights with the Australian Government. We highlighted challenges faced by consumers and financial firms. This included routine discussions with Parliamentary Committees, regulators, Treasury and other Government Departments. We briefed ministers and other Members of Parliament on complaints relevant to their communities. These conversations often focused on natural disasters and significant events.

We continued our regular Consumer Advisory Panel and Consumer Advocate liaison meetings. By bringing together leaders and representatives from community services, we’re able to keep in touch with the concerns and needs of our diverse community.

Our business and IT transformation

As many of our members know, AFCA is undergoing a business and IT transformation. Soon, we'll introduce three new systems: one for AFCA case management, a consumer portal for complainants and their representatives, and a new portal for our members. 

The systems will help us streamline operations, offering members, consumers and small businesses the advantage of self-service tools, automation, and real-time information and insights.

Our commitment to Reconciliation 

In December, we introduced our Reflect Reconciliation Action Plan (RAP). It outlines actions we have committed to over the past year. These include instilling a deeper understanding of First Nations peoples cultures throughout AFCA; fostering stronger, respectful relationships and improving opportunities for First Nations peoples. 

Our commitment to Reconciliation is at the core of our mission as a national ombudsman scheme. We aim to provide First Nations peoples with empowering, culturally respectful, informed, adaptable and accessible services. We acknowledge the significance of oral storytelling and are working to ensure First Nations voices are heard on financial matters. 

Closing remarks

Before closing, I would like to thank AFCA’s people, led by our dedicated CEO and leadership team, who shaped AFCA’s remarkable year. I deeply appreciate your commitment and hard work.

The Board’s guidance has also been instrumental in AFCA’s success, and I thank everyone for their contribution. 

The year ahead brings great promise. In April 2024 the CSLR is scheduled to open for applications. 
Although AFCA has assisted in setting up the CSLR company, it will stand as a separate, independent entity, governed by its own board. 

We are also excited about the service improvements our IT transformation project will bring. We look forward to more challenges and triumphs in the year ahead.

Thank you, and welcome David.

CEO and Chief Ombudsman address

Thank you Chair. Good afternoon everyone. I’m David Locke, CEO and Chief Ombudsman of AFCA. I too would like to begin by acknowledging the Traditional Owners of the lands on which we meet today, and I pay my respect to their Elders past, present and emerging, and to any First Nations peoples joining us today.

This land was, is, and always will be Aboriginal land and was never ceded.

As mentioned, this was the busiest year in AFCA's history, with 34% more complaints received than last year. It is less than five years since AFCA started in 2018, and we have already resolved over 370,000 complaints. 

Along with our crucial ‘business  as usual’ work,  this year we continued to: 

  • progress our business and IT transformation project
  • expand our community outreach and stakeholder engagement program 
  • respond to Treasury's Independent Review recommendations; and
  • embed AFCA’s internal culture.

Despite a very demanding year, I am proud of AFCA’s achievements. 

Customer service

AFCA is committed to delivering fair, efficient and timely services. When an individual or business comes to us, the process should be as seamless and simple as possible. 

Our business and IT transformation project has been redesigning our processes to achieve this.  As John touched on, we’re on track to deliver three new systems next year. Our new member portal, consumer portal and integrated case management system will offer a streamlined, user-friendly, and partly automated complaint handling process. 

For our members, the new portal will be easy to use, improve timeliness and reduce administrative tasks and address the frustrations we know you've had for a number of years with the current system. I am excited to confirm these systems will be in use in the first half of 2024.

Awareness, accessibility and outreach

AFCA has a duty to meet the needs of all the diverse communities we serve. Every Australian should know about their financial ombudsman and how to access it. We are dedicated to creating a customer experience that is culturally sensitive, respectful, inclusive and flexible. Our services must be safe and equitable. Information must be offered in multiple languages across varying formats.

This year marked the second year of our three-year awareness strategy. This involved an 'always-on' approach across traditional, digital and social media channels. We focused on supplying resources to vulnerable communities and individuals facing hardship or recovering from natural disasters. 

This year, we:

  • expanded our Community Engagement team 
  • launched the AFCA Peer Support Network pilot program, offering training in trauma-informed practice, and support for survivors of domestic violence; and
  • entered the next phase of our reconciliation journey with the launch of our ‘Reflect’ Reconciliation Action Plan. 

We have significantly expanded our community outreach program this year. We connected with, and supported:

  • Aboriginal and Torres Strait Islander communities
  • culturally and linguistically diverse communities
  • people living with disabilities
  • newly settled migrants
  • older Australians who may be victims of financial elder abuse
  • survivors of family violence; and
  • communities affected by natural disasters.

Our dedication to ongoing community engagement has led to valued relationships with this sector. This includes consumer advocates directly involved in both internal and external dispute resolution.

This year, we attended and presented at Financial Counselling Australia conferences across Australia.  We were also part of First Nations community events including the Yabun Festival, Warangesda Festival and the Miriwoong Forum. We visited Thursday Island to learn about issues affecting the local community, such as scams and Buy Now Pay Later. We explored ways to make our services more accessible there.

Independent Review

Over the last 12 months, we continued our response to Treasury’s Independent Review of AFCA. The review reflected positively on our operations and made 14 recommendations, 13 to AFCA and one to government. 

We successfully completed four recommendations in the 2022 calendar year. We expect to complete an additional five by early 2024 and we continue to make progress against all others.

Rules consultation

From March to May, AFCA ran a stakeholder consultation process on proposed changes to our Rules and Operational Guidelines. This is the first time that AFCA has undertaken a review of our Rules and Operational Guidelines and sought to make changes. We sought to address recommendations from the Independent Review, which required changes to complete that work, and add other amendments to keep the Guidelines up to date and fit for purpose. We also wanted to make AFCA's jurisdiction and processes clearer.

As one of the most substantial external consultations we have undertaken, I am proud of how well it was received, and we thank all members who participated in that process. Subject to approvals from the AFCA Board and ASIC, the proposed new Rules and OGs will start on 1 July 2024. 

Systemic issues

This year, in line with our ongoing response to Recommendation 13, we launched the first and second editions of the AFCA Systemic Issues Insights Reports. These are all available on our website. These reports uphold our commitment to being open and offering stakeholders a look into systemic issues across the industry. They include recent data and findings to assist financial firms in improving practices.

Reviewing our approach documents

This year we consulted on our ‘Approach to Claims for Non-Financial Loss’ and published our ‘Approach to Motor Vehicle Total Loss Complaints’. We developed two new banking and finance documents, ‘AFCA’s Responsible Lending Approach’ and ‘Appropriate Lending to Small Business Approach’. Consultation on these ran from July to September 2023.

Our people and culture

Embedding our culture was another priority for AFCA this year. It’s really important that we have the right culture in our organisation if we are going to provide good services to our members, as well as being able to work effectively with the consumers that come to us. We received a number of awards acknowledging our culture. We were delighted to be recognised as one of the top five best places to work in the AFR BOSS Best Places to Work rankings. 

AFCA was accredited as a family friendly workplace. This significant achievement recognises our commitment to delivering equality, inclusivity and wellbeing outcomes for our employees and their families. We believe if we treat our people well, they will be well enabled to support you well.  

We were also awarded Bronze Tier Status in the Australian Workplace Equality Index. This is a national standard for LGBTQ+ inclusion awarded by Pride in Diversity.

We champion diversity, encourage inclusivity, and cultivate a sense of belonging. In March this year, we unveiled our Diversity, Inclusion, and Belonging Strategy. 

The strategy, alongside a detailed three-year action plan, sets out our priorities across four pillars: 

  1. Inclusive systems and processes
  2. Leadership capability
  3. Diverse thinking teams; and
  4. Governance and accountability 

Our focus is on refining our policies, recruitment, promotion and messaging. As part of this strategy, we established three new employee resource groups: 

  1. family and carers
  2. people from culturally and linguistically diverse backgrounds; and 
  3. people living with a disability. 

These are in addition to AFCA’s existing Ally Network. By valuing the different backgrounds and perspectives of our people, we enhance our collective strength to drive better outcomes for those we serve. We seek to represent the communities we serve, to understand the communities we serve, to understand the broad range of membership that we have, and to be in a position where we can work effectively with you. We want our people to feel, and be, included, respected and empowered to learn, grow and lead. 

Better ways of working 

As a knowledge-based organisation, we want to make sure everyone has a shared understanding of what needs to be done. We’ve been working towards a central, reliable, and up-to-date information source. This will improve our operational efficiency, and ensure consistency and predictability in decision-making. 

Last financial year, we launched a new intranet and designed our Knowledge Centre to replace our traditional resource libraries. In the next year, we will shift our entire business operations to the new Knowledge Centre. 

Closing remarks

In closing, I’d like to thank AFCA's Chair and Board for their support and diligent performance in their governance role this year.  To AFCA’s dedicated staff, whose commitment to fairness and justice drives our service, thank you. Our people’s relentless efforts, despite increased workloads, have upheld our responsibility to the community and financial sector. 

I was delighted to be re-appointed this year for a second 5-year term as Chief Ombudsman and CEO of AFCA. As another year begins, I am excited to stay on this journey as we continue to build a world-class ombudsman service.

The future will continue to present challenges such as rising interest rates, cost-of-living challenges, escalating financial scams, reinforcing the need for AFCA’s services. 

Thank you. 

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