Presentation to the Select Committee on Finance National Council of Provinces NCOP 14 February 2017 Presentation may not be reproduced without permission of Ombudsman for Banking Services ID: 1028720
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1. Ombudsman for Banking ServicesPresentation to the Select Committee on Finance - National Council of Provinces (NCOP)14 February 2017@ Presentation may not be reproduced without permission of Ombudsman for Banking Services
2. FormatVision and MissionStatistical thumb pointsCase flow comparisonFiles opened per bankHow cases were closedCases closed at Assessment Cases closed at InvestigationSum recovered Treating Customers Fairly Demographic data2@ Presentation may not be reproduced without permission of Ombudsman for Banking Services
3. MissionThe Ombudsman for Banking Services is dedicated to providing banks and their customers with a quick and efficient dispute resolution service. Our professional staff aims to do this in an impartial, independent, fair and confidential manner and strives to improve general banking practice.VisionThe Ombudsman for Banking Services will be known by all banks and their customers for its impartial and well-reasoned resolutions of all complaints within four months.3@ Presentation may not be reproduced without permission of Ombudsman for Banking Services
4. @ Presentation may not be reproduced without permission of Ombudsman for Banking Services4Statistical Thumb PointsComplaints received5219Complaints closed5214Turnaround times / closure (average)52 daysAmounts recoveredR15 millionMatters resolved after 0 - 2 months69,33%Matters resolved after 2 - 4 months27,04%Matters resolved after 4 - 6 months3,36%Matters unresolved after 6 months0%Percentage resolved in favour of complainants24,00%
5. @ Presentation may not be reproduced without permission of Ombudsman for Banking Services5Case flow comparisonEnquiries20152016Walk in276252Referrals42255690Call centre1658717036Total enquiries2108822978
6. @ Presentation may not be reproduced without permission of Ombudsman for Banking Services6Files opened per bank20162015Absa888794FNB1036930Standard12791530Nedbank888910Capitec948692African123110Ubank1721Investec119Mercantile26
7. @ Presentation may not be reproduced without permission of Ombudsman for Banking Services7Files opened per bank (cont.)20162015Ithala65Bidvest124Bank of Athens45Sasfin13Bank of Taiwan01Finbon Mutual Bank11Grindrod10CitiBank00VBS10
8. @ Presentation may not be reproduced without permission of Ombudsman for Banking Services8How the cases were closed in 2016Case categoryFor bank%For public%Cases Total%ATM116484%21616%1380100%Internet Banking73678%20422%940100%Mortgage Finance37975%12425%503100%Credit Cards33468%15532%489100%Current Acc29464%16836%462100%Car Finance22778%6522%292100%Personal loan30468%14332%447100%Savings Acc10773%4027%147100%
9. @ Presentation may not be reproduced without permission of Ombudsman for Banking Services9How the cases were closed in 2016 (cont.)Case categoryFor bank%For public%Cases Total%Investment8081%1919%99100%Estates & Trust3276%1024%42100%Insurance2162%1338%34100%Other2271%929%31100%Debit Orders1860%1240%30100%Overdraft1986%314%22100%Credit Bureau1260%840%20100%Cheques1579%421%19100%
10. @ Presentation may not be reproduced without permission of Ombudsman for Banking Services10How the cases were closed in 2016 (cont.)Case categoryFor bank%For public%Cases Total%Teller deposit dispute1684%316%19100%Cash/Cheque Scam1583%317%18100%Business Finance1165%635%17100%Foreign Exchange1083%217%12100%Suretyship6100%0%6100%Safety Deposit5100%00%5100%Grand Total382576%120824%5033100%
11. @ Presentation may not be reproduced without permission of Ombudsman for Banking Services11Cases closed at assessment2016201574%70%An assessment is the speedy settlement of a complaint. Once a bank's response to a complaint is received, a manager assesses the merits of the complaint. An assessment report is drafted setting out the reasons for our finding.
12. @ Presentation may not be reproduced without permission of Ombudsman for Banking Services121345 cases for further investigation finalisedResult20162015Assessment reports13401457Formal mediations411Provisional recommendations10Final recommendations00
13. @ Presentation may not be reproduced without permission of Ombudsman for Banking Services13Total recovered from banksMillions201510201615
14. Ensuring Fair TreatmentThe OBS proactively assigns a TCF outcome to each case concluded@ May not be reproduced without permission of Ombudsman for Banking Services14
15. @ Presentation may not be reproduced without permission of Ombudsman for Banking Services15Demographic DataPopulation GroupAgeNature of ComplaintNumberPercentageAfrican Males40+ATM2105,88%Internet Banking1484,10%Mortgage Finance732,00%African Males31-40ATM722,00%Internet Banking451,20%Mortgage Finance280,78%
16. @ Presentation may not be reproduced without permission of Ombudsman for Banking Services16Demographic Data (cont.)Population GroupAgeNature of ComplaintNumberPercentageWhite Males40+ATM1123,00%Internet Banking1323,69%Mortgage Finance561,57%African Females40+ATM1434,00%Internet Banking1062,97%Mortgage Finance401,12%
17. @ Presentation may not be reproduced without permission of Ombudsman for Banking Services17Demographic Data (cont.)Population GroupAgeNature of ComplaintNumberPercentageWhite Females40+ATM822,29%Internet Banking712,00%Mortgage Finance300,84%
18. @ Presentation may not be reproduced without permission of Ombudsman for Banking Services18StructureComposition of the board –a) number of members8b) number of industry reps3c) number of consumer reps2d) number of independents5 (industry representatives, cannot outvote the independent directorse) manner in which appointedAppointed by Boardf) otherN/Ag) Legal structure of the scheme -The OBS is a voluntary scheme. It is registered "not for gain" company (Registration No. 2000/002577/08)
19. 19@ Presentation may not be reproduced without permission of Ombudsman for Banking ServicesFunding –a) source of fundingMember banksb) structure of fundingContribution is calculated on a model that takes into account number of complaints in previous financial year and market share of each bank (percentage of total deposits and liabilities)c) discounts/ incentives or rebatesNo incentives/discounts/ rebates applicable
20. 20@ Presentation may not be reproduced without permission of Ombudsman for Banking ServicesExpertise & Staffing –a) number of staff compliment21b) no of case handlers/adjudicators11c) qualifications of case handlers / adjudicatorsMinimum LLBNote:Average length of service / experience of adjudicators is 6 years. Very low staff turnover. Stable staff.
21. 21@ Presentation may not be reproduced without permission of Ombudsman for Banking ServicesFinancial Reporting –a) to whomTo Ombudsman Board, Banks and Public
22. 22@ Presentation may not be reproduced without permission of Ombudsman for Banking ServicesParticipation –a) compulsory or voluntaryVoluntaryb) how does industry participant enrol?Through Banking Association of South Africa (BASA)c) How does industry participant resignCease to be a member of BASANote:Membership of a bank is compulsory in the sense that a banking licence will not be granted to a bank unless that bank subscribes to the OBS.
23. 23@ Presentation may not be reproduced without permission of Ombudsman for Banking ServicesIndependence –a) checks and balancesOmbudsman enjoys security of tenure. Ombudsman cannot be dismissed and certainly not for making a ruling which the banks and/or consumer groups are not happy with.Majority of Board Members independent non executive.Ombudsman answerable and accountable to Board and not industry. Board protects independence of Ombudsman and ensures office adequately resourced. b) interaction with industryCEO visits, regular Liaison Meetings, Bulletins, workshops, talksc) otherN.A.
24. 24@ Presentation may not be reproduced without permission of Ombudsman for Banking ServicesJurisdiction –a) current jurisdictionClaims up to R2 million, not older than 3 years or prescribed in law, brought by natural person or small business with turnover <R10 million. b) procedure for amendmentBoard Resolution / FSOS approval and registration
25. 25@ Presentation may not be reproduced without permission of Ombudsman for Banking ServicesHow complaints are –a) receivedonline, by email, post, fax or personal delivery, in writing on our prescribed Application for Assistanceb) processed;Complaints are captured on database system and forwarded to the member banks’ designated officer within the dispute resolution department to respond within 15 days.Once all information is available to make a finding, be it immediately or from further investigation, a report is issued setting out reasons for our findings, which report may be in an Assessment format or a Recommendation format. If a Recommendation is not accepted by both parties, the Ombudsman may issue a Determination if the complaint complies with certain criteria. Either party may apply for the Determination to be Reviewed by a Review Panel consisting of three retired judges.
26. 26@ Presentation may not be reproduced without permission of Ombudsman for Banking ServicesHow complaints are (cont.) –c) determinations/findings enforcedA Determination (subject to a right to Review) is by agreement binding on both parties. The successful party may approach a court of law to make the Determination or Review an order of court.d) Quality controlEach case is reviewed by a manager.e) Independent external assessorRetired judge reviews random cases every 3 years.Independent firm of auditors audits our case management system (CRM) and our statistics every 3 years.
27. 27@ Presentation may not be reproduced without permission of Ombudsman for Banking ServicesPublication and communication –a) of rulingsIssued to parties. Certain case summaries published without party details on website and Annual Report.b) of systemic issuesReport to CEO of Banks and/or Board and/or FSOS Council and/or Registrar of Banksc) of statisticsMonthly statistics issued to member banks and Board members. Quarterly statistics issued to member banks.d) of journalsNone published.e) otherN.A.
28. 28@ Presentation may not be reproduced without permission of Ombudsman for Banking ServicesCoverage –a) area of operationNational.b) type of products dealt withBank products and services.
29. @ Presentation may not be reproduced without permission of Ombudsman for Banking Services29StatisticsComplaints received5219Complaints closed5214Turnaround times / closure (average)52 daysAmounts recoveredR15 millionMatters unresolved after 6 months0%Percentage resolved in favour of complainants24%
30. @ Presentation may not be reproduced without permission of Ombudsman for Banking Services30Relationship with Financial Services Board (Regulator)Member of Market Conduct Regulatory Framework Steering Committee MeetingsNational Treasury Consumer Financial Education Committee MeetingsLiaison with the FSB on implementing TCF.
31. @ Presentation may not be reproduced without permission of Ombudsman for Banking Services31IT SystemsCustomer Relationship Management (CRM)We use a customer relationship management (CRM) tool, which is a Microsoft database. Although our database is Microsoft, our CRM was built from scratch to meet our specific requirements. Our system does the following:1.Complainants can apply electronically via our website or smart phone. They simply click “submit”, and our system converts the complaint into an actual case.
32. @ Presentation may not be reproduced without permission of Ombudsman for Banking Services32IT Systems (cont.)2.At the initial or referral stage we capture all the complainant’s personal details and details of the complaint.3.The OBS complies with the Protection of Personal Information Act (POPI). All our servers are secure and all our computers are encrypted.4.When the referred complaint becomes an actual case we simply press a button that converts the referral into a full case.
33. @ Presentation may not be reproduced without permission of Ombudsman for Banking Services33IT Systems (cont.)5.Automatically, a letter is generated to the bank and to the complainant confirming receipt of the complaint and undertaking to keep them advised of progress.6.Once the response is received from the bank, our tracking system automatically attaches the bank’s response to the correct complaint. The bank’s response is then sent to the complainant.7.The CRM generates allocation lists so that cases are allocated to adjudicators on an equal basis.
34. @ Presentation may not be reproduced without permission of Ombudsman for Banking Services34IT Systems (cont.)8.We generate monthly statistics. We generate bank specific statistics on cases opened, cases closed, average time taken, Treating Customers Fairly statistics, etc.9.We also generate all of the above statistics for all of the banks in total.10.The statistics are used to determine the number of cases for the year for each bank for the purposes of bank contributions.
35. @ Presentation may not be reproduced without permission of Ombudsman for Banking Services35IT Systems (cont.)PayrollWe use the Payday System for payrollAccounting SystemOur accounting system is Pastel Partner
36. @ Presentation may not be reproduced without permission of Ombudsman for Banking Services36Technological InnovationsTelephonic ComplaintsThe OBS has launched a dedicated telephone complaint system. A complainant can now lodge a complaint over the telephone.Tracking Progress of complaintBank customers are able to track the progress of their cases once they have lodged a complaint with the OBS.
37. @ Presentation may not be reproduced without permission of Ombudsman for Banking Services37Technological Innovations (cont.)Telephonic Assessment ReportsThe OBS has introduced telephonic assessments for complaints that fall outside its jurisdiction and other simpler complaints.Banking App / SmartphoneThe OBS has introduced a mobile application that allows a complainant to download an application for assistance form, complete it and send it.