Opening address – David Locke, Chief Ombudsman and CEO

Acknowledgement of country 

Thank you, Rob. And thank you to our members for joining us over the next two days. 

As Rob mentioned, I’m David Locke and I am the Chief Ombudsman and Chief Executive Office at AFCA.    

I would like to begin by acknowledging the Traditional Custodians of the different lands on which we are meeting today, and pay my respects to elders past, present and future – for they hold the songlines, the stories, the traditions, the culture, and the hopes of First Nations Australia.  

This land is, was, and always will be traditional First Nations country.  

I also acknowledge and pay my respect to the Traditional Custodians of the lands on which AFCA works, the Wurundjeri, Boonwurrung, Wathaurrung, Daungwurrung and Dja Dja Wrung peoples of the Kulin nation and the Gadigal people of the Eora Nation. 


Welcome, again, to our Member Forum. Over the next two days, you will hear from our senior leaders and decision makers across our different product areas about the complaints we’re seeing and the emerging issues that we, together, will need to address in the near future. Whether you choose to attend one or all sessions, I hope you find the information and discussions useful. 

Establishment of AFCA  

This Member Forum is a special one – as this November marks five years of AFCA.  

Borne out of recommendations from the Ramsay Review to create a new single EDR body, one that could ‘withstand the challenges of a rapidly changing financial system’; the establishment of AFCA was an important step forward for Australia, as we together, took action to rebuild trust and confidence in the financial services sector.  

The Ramsay Review had concluded, that while our predecessor schemes FOS, the CIO and the SCT had done good work; having multiple EDR schemes meant “an increased risk of consumer confusion”, and among other things, a duplication of costs for financial firms.   

Of course, bringing these schemes together to form a one-stop-shop scheme was no easy feat. We faced challenges – not just in bringing together our predecessors’ systems and processes, but also, in raising awareness among consumers and confidence among industry.  

Despite a demanding five years – shaped by natural disasters, a global pandemic, the rise of scams, and changes in policy, government and reform – I am proud of what we have achieved and how far we have come.  

Five years of complaints 

To date, we have handled more than 400,000 complaints from consumers and small businesses, working with more than 4,000 financial firms to provide finality to complaints that were unable to be resolved before AFCA.  

In the last financial year alone, we received nearly 100,000 complaints. To put this into context, when the Ramsay Review was established, FOS, the CIO and the SCT were receiving a bit over 41,000 complaints a year in total. 

Our systemic issues function has also achieved significant outcomes in this time. Since 1 November 2018, we have reported 295 definite systemic issues. This work has delivered many positive outcomes to consumers and financial firms alike.  

I thank our members for their work to resolve these issues, and the actions they took to remediate their customers.  

I too, would like to acknowledge that most of our members have not had complaints raised against them since AFCA commenced. Each year since 2018, around just 16% of financial service provider members had complaints raised with AFCA.   

Of course, resolving disputes is not all we have achieved. Because of our proactive and collaborative engagement with industry – and our members’ receptive approach – we have seen many of our members improve practices and embed new processes to ensure fewer complaints occur or are escalated to AFCA in the first place.  

While volumes are certainly up among some sectors, for several different reasons, I’d like to thank industry for your efforts over the years.  

Commitment to timeliness and efficiency  

Despite the increased workload that comes with being a one-stop-shop scheme, we have consistently tried to handle complaints in the most efficient and timely way possible. 

We know the best outcome for everyone is early resolution. For consumers, the sooner a matter is resolved the better able they are to put the stress of a complaint behind them. While for our members, restoring customer goodwill is simply good for business. 

In our first five years, our strong focus on efficiency, and ongoing improvements to technology and data capabilities, has seen 60 per cent of all cases resolved in less than 60 days.  

On average, complaints in our first five years were resolved in 69 days. This compares very favourably against our predecessor schemes as well as against ombudsman schemes internationally. 

Again, this is in part also thanks to your work in resolving complaints with us and your customers.  

Changing nature of complaints 

While the volume of complaints has certainly increased, so too, has the nature of the disputes we see – not only in the products and services complained about, but also in the response from industry to tackle new challenges and address complex issues.  

The Australian community, including our members, has experienced devastating bushfires, floods, the COVID pandemic, rising interest rates, and the rise of complex scams and financial crime. And these challenges are reflected in our complaints. 

To date, we have worked with more than 7,500 people affected by weather-related natural disasters, as well as nearly 30,000 people experiencing financial difficulty. During the pandemic, we saw more than 17,000 COVID-related complaints, helping to resolve disputes about travel insurance, superannuation and hardship. During these trying times, members were quick to act and together we saw fewer disputes than anticipated.    

While the steep rise in scams is more recent, we have also already supported at least 16,500 scam victims. We continue to work closely with industry, regulators and government to keep our approaches to this dynamic space aligned.  

I know our members, too, are doing a lot of great work in this space, but we will need to do much more to address this issue, including a strong, uniform protections for consumers.   

Credit complaints have also changed as people face rising costs of living this year. We have seen the popularity of buy now, pay later products lead to more complaints about this form of credit. BNPL providers are not required to be members of AFCA, but I acknowledge those who join voluntarily to give their customers access to AFCA.  

Insurance complaints on the rise 

We’ve also seen the numbers of insurance complaint numbers progressively grow since 2018. As we have said before, these heightened complaint volumes are not primarily tied to claims from natural disaster, but stem from ‘business as usual’ insurance claims. 

In response, we have been working closely with our insurance members to encourage earlier resolution. We regularly provide feedback, including our concerns about where we think performance can be improved.  

Promisingly, these conversations are beginning to lead to positive outcomes with some insurers. But all need to really step up and do so now. We look forward to supporting the sector to address these challenges over the coming year.   

Working with industry 

Working with industry has also been a priority for AFCA over the years.  

We play a unique role in the financial services sector, and developing strong and meaningful relationships with our members is critical to our ability to inform change and influence better practice. 

Our dedication to this, and our collaborative approach, helps us to deliver a great service to our members. This is consistently shown in our annual member surveys. Most recently, we received an 82% member satisfaction rate, which is up by 5% from the previous year.  

Benchmarking dashboard and reporting 

It is also part of our vision to contribute to improved practice in the financial services industry. We do this by sharing data and insights from the disputes we manage that we think will support members to take positive steps in resolving – and even preventing – complaints. 

One way we do this is through our self-servicing, real-time data and insight tools.  

In 2019, we launched the AFCA Datacube – our online comparative reporting tool that gives members a statistical understanding of how they compare within their industries.  

And in 2021, we released the Member Benchmarking Dashboard – our interactive platform that provides near real-time complaints data to members. Updated daily, this tool gives members a greater understanding of their complaints, including how quickly they are being resolved. It also enables members to compare their performance against an anonymised set of similar financial firms.  

In our most recent Member Survey, 85% of members surveyed said they find these data tools valuable.  

More is planned in this space. We hope in future releases of our soon to launch new member portal, the introduction of artificial intelligence will enable more data, analysis and reporting for our members via the portal.  

Justin Untersteiner will talk more about our new member portal this morning. 

Improving member resources 

We have also made significant improvements to the resources available to our members since 2018. From events like our Member Forums and educational webinars – which receive high attendance rates – to training and explainer videos about our process and functions, we have built a sizeable library of tools for our members.  

Our monthly e-newsletter Member News is another great resource. This e-newsletter is sent to member subscribers each month and receives great engagement. In our annual Member Surveys, more than 90% of members make use of Member News, and the same again say they find the newsletter valuable.  

This monthly digest is just one way we keep you informed of our work, consultations, and projects. 

New funding model 

Fairness is AFCA’s guiding principle. And this is not limited to complaint handling. We strive for fairness in all aspects of our work and operations.  

When AFCA started in 2018, our member funding model was a mix of fixed revenue through a Membership Levy a Superannuation Levy, a User Charge and variable revenue through complaint fees. This model was not sustainable, or fair for all members.  

So, in early 2021, we undertook a review to develop a new model that would be fit for purpose, sustainable and fair. 

After consultation, the new model came into effect on 1 July 2022. The new ‘user-pays’ model was supported by a majority of members as it reduced the burden on smaller members and those industries that were not heavy users of AFCA. 

Our new funding model has now been in place for more than a year. A recent review has found it is operating as intended, and has achieved its objectives.  

Broadly across the key features and expected outcomes, actual fees and the distribution to members closely aligned to the modelling completed as part of the model’s design. 

Approximately 88% of our members saw a decrease or no change in their total annual fees in the first year, in line with the expected total change. 

95% of financial firm members only paid their annual registration fee, and 14% received the 1 to 5 free complaints and had no other charges.  

With the removal of the superannuation levy, 74% of our super fund members saw a decrease in fees, with 32% only paying the annual registration fee.  

These are tangible, fair outcomes and we are glad to see the model operating as intended.  

The introduction of our new funding model also completed recommendations 7 and 8 of Treasury’s Independent Review of AFCA.  

Closing remarks 

The last five years of AFCA have seen great growth and change. 

The future brings great promise as well, particularly as we finish our IT transformation project to deliver an even better experience to consumers, our people and our members.  

Of course, there will continue to be challenges and triumphs – both for AFCA and industry. However, I can say confidently that AFCA is in a strong position to continue its important work. 

That brings me to the end of my presentation today.    

Thank you for joining me this morning.  

I now pass you to June Smith, who will provide an update on our response to Treasury’s Independent Review of AFCA. 

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