The action plan published today (December 2) sets out how the Fos will aim to improve its delivery for customers and provide help resolve cases more quickly.
In October, the Fos said it began the last financial year with 28,000 cases waiting to be investigated and the additional demand over the pandemic meant it ended the year with more customers waiting for an “unacceptably long time”.
It emerged the Fos was offering staff “voluntary overtime” to tackle its cases backlog.
As part of the process to address this, Fos is changing its operating model to be more efficient and effective.
It said the current operating model, introduced in 2015, was predicated on the number of complaints reducing - but this has not happened.
“Our investigators and ombudsmen have generally been expected to deal with all types of complaints, which have become increasingly varied and often more complex,” it said. “This, together with increased management and administrative responsibilities, has contributed to our not being able to realise our productivity ambitions.”
The plan will see Fos move to a simpler, more accountable casework operating model to improve the way it handles complaints from entry point to resolution.
In particular, it will focus on consolidating existing teams into a clearer structure based on industry-specific areas and allowing casework leaders to set targets, manage budgets and set their teams' priorities.
It will also improve triaging processes and develop a digital portal to make it easier for complainants to interact with the Fos.
The Fos said it would also use "intelligent automation" to speed up the process, for example by using technology to convert digitally submitted complaints directly into case files.
The action plan, which was approved by its board in response to an independent periodic review, also set out how the Fos will consider revisions to its funding model to incentivise constructive behaviour in the financial services industry.
“Although case fees and levy contributions have increased in recent years, the underlying funding model has not changed,” it said. “We will be considering this position for budgets in 2022-23 and 2023-24 – and will consult as appropriate.”
The Fos said it has adjusted its reserve expenditure by freeing up funding from a six month to three-month reserve as “a step towards a financially sustainable future”.
MPs have previously expressed concerns that the Fos is funding its expenditure through its reserves.
The review undertaken was split into two parts with the first phase looking at the current operational effectiveness of its service, and the second phase looking into how the Fos must adapt to address changes in the financial services sector.
The Fos explained the review highlighted its strengths, such as the impartiality of decisions and its open and inclusive approach, but it demonstrated that even with the changes and innovations being made to clear backlogs, it needed to go “further and faster”.
Baroness Zahida Manzoor, chairman of the Fos, said: “The board commissioned this independent review to get an impartial perspective on current and future challenges. With a continuing commitment to impartiality and fairness as our foundation principles, we are now entering a new phase for our organisation.
“As we move forward, we value our strong working relationships with the Financial Conduct Authority, the wider regulatory family and look forward in partnership to preventing and addressing detriment to our customers. This action plan will help the Financial Ombudsman Service to play its part.”
Nausicaa Delfas, interim chief executive and chief ombudsman, added: “The Financial Ombudsman Service is at a pivotal point. The action plan is our commitment to continue to make the changes we need to resolve customer complaints more quickly.
“We will be changing our operating model, leveraging technology, and ensuring we share our insights to prevent complaints from arising in the first place. This builds on the work we have already done to almost halve our backlog so far this year.
“This review has given us the opportunity to reset and move forward, and we are determined to seize it.”
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