AFCA wraps up three-year reform program following independent review

The Australian Financial Complaints Authority (AFCA) has completed a three-year initiative designed to address recommendations from Treasury’s 2021 Independent Review of its operations.

The program aimed to enhance AFCA’s approach to dispute resolution and improve its processes for managing financial complaints.

Deputy chief ombudsman Dr June Smith, who oversaw the program, stated that the changes were intended to ensure AFCA could meet the needs of stakeholders more effectively.

“This program highlights the organisation’s evolution and its investment in building capabilities to address emerging challenges and opportunities,” she said.

AFCA independent review

The initiative coincided with a rise in complaint volumes. During 2023-24, AFCA received over 105,000 complaints, more than double the total handled by its three predecessor schemes in their final year of operation.

The program was developed in response to 13 recommendations from the Independent Review and included several key actions:

• issuing new guidance on handling complaints that raise additional issues and on excluding wholesale client disputes
• strengthening consultations on AFCA’s approach documents and establishing a mechanism to keep them up to date
• enhancing clarity around the role of the independent assessor
• defining AFCA’s and regulators’ responsibilities in managing systemic issues
• overhauling systemic issues management and updating funding models
• introducing a new case management system and customer portals to improve service efficiency
• commissioning independent reviews to assess fairness in decision-making processes
• revising rules and operational guidelines to reflect updated practices, including on responsible lending and small business lending

An independent review of AFCA’s case decisions found that 90% of randomly selected files met a standard of “Good” or “Excellent.”

Smith expressed appreciation for the support of stakeholders and noted that AFCA would continue refining its services.

“The Independent Review Response Program has been a catalyst for change, enhancing our service delivery while fostering collaboration and innovation,” she said.

AFCA updates Datacube

As part of its aim to enhance its approach to dispute resolution,  AFCA recently updated its Datacube, a digital tool providing detailed information on complaints lodged against financial firms.

The latest version includes data for firms that received at least four complaints between July 1, 2023, and June 30, 2024.

The Datacube, launched in 2018, allows users to search for complaint data by firm name, service type, product category, or location. The tool is aimed at helping financial firms assess their performance relative to peers and providing consumers with insights to make more informed decisions.