The Financial Ombudsman Service is to reform the organisation to provide a better service to customers.

The FOS has been criticised in recent times for long delays in dealing with complaints and rising backlog of cases.

The FOS says its ‘Action Plan’, published today, should mean cases are resolved more quickly.

A number of major changes will be made to the organisation. These include the FOS empowering case workers to make more decisions, shifting to a more digital model for new complaints and setting targets for caseworkers to improve productivity.

The complaints body will also review its funding model to, “incentivise constructive behaviour in the industry.” The FOS says although case fees and levy contributions paid by firms have increased in recent years the underlying funding model which pays for the FOS has not changed. The body will reconsider its funding for 2022/23 and 2022/24, it says.

The FOS says the rise of cyber crime and internet-related complaints has meant that an expected drop in complaints has not materialised. The FOS says there are also increasingly sophisticated online scams leading to an increase in the number of cases.

The Action Plan announced today follows an extensive independent review of the organisation by consultants Oaklin Consulting over the summer.

The Action Plan will mean:

• A new operating model to make the FOS "more effective and efficient" to resolve cases more quickly. 
• Increasing technology and digital capabilities to drive productivity and to make it easier for customers to deal with the FOS
• Boosting engagement with stakeholders and taking a “robust and proactive” approach to prevent complaints and unfairness 
• Using insights from case handling to prevent further harm to consumers
• Exploring revisions to the funding model to ensure a “sustainable” future 

Financial Ombudsman Service, interim chief executive and chief ombudsman, Nausicaa Delfas said: “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.”

Financial Ombudsman Service chairman Baroness Zahida Manzoor said: “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 (FCA), 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.”

• The Financial Ombudsman’s action plan is here.