How the NFO is bridging the gap for vulnerable financial consumers

Providing timely and appropriate assistance to consumers, particularly those residing in rural areas or who are economically vulnerable, can significantly curtail complaints relating to financial products and services.

This is according to Reana Steyn, chief executive officer and head ombud of the National Financial Ombud Scheme South Africa (NFO), which commenced operations on 1 March 2024 following the consolidation of the Non-life and Life Insurance, Banking, and Credit Ombuds.

Between March 1 and December 31, 2024, the NFO managed 35,855 complaints and facilitated recoveries totaling R328,550,212.58 on behalf of aggrieved financial customers.

“It is significant that small towns and rural/farm areas accounted for 32,10% of all complaints,” says Steyn.

Haroon Laher, chairperson of the NFO, has urged financial service providers to be cognisant of the widening gap between different consumer demographics, including those in urban and rural locations, as well as between financially sophisticated and vulnerable individuals. Laher says: “There are instances that point to information not being clear, thus causing confusion, and not being provided upfront,” highlighting how disparities in financial literacy and access to clear communication can lead to consumer dissatisfaction.

He further underscores the value of identifying patterns in complaints in order to prevent repetition and improve service delivery. “The lessons learnt from the root causes of complaints can avoid repetitive grievances. The NFO will work towards ensuring inclusivity for financial services and products and, thereby, help to bridge the gap between the urban and rural, the sophisticated and vulnerable and disadvantaged,” Laher says.

According to the NFO’s inaugural annual report, complaints vary notably by province, highlighting inconsistencies in financial concerns and awareness of redress mechanisms.

Steyn says Gauteng, as the nation’s financial centre, recorded the highest number of complaints at 42,18%, followed by the Western Cape (19,14%), KwaZulu-Natal (14,07%) and the Eastern Cape (7,6%). Collectively, Mpumalanga, North West, Limpopo, and the Free State contribute to the national footprint, while the Northern Cape, at 2,09%, reinforces the need to expand outreach to marginalised areas. “This geographic diversity highlights the work that we still need to do to ensure that every consumer, regardless of location, has equal access to justice,” says Steyn.

She says analysis of complainant demographics reveals that women submitted 55,55% of all cases, while men accounted for 44,34%. Individuals identifying as non-binary comprised 0,03%, and a further 0,09% preferred not to disclose their gender. The majority of complaints originated from Black consumers (53,53%), followed by White (26,77%), Coloured (10,41%), and Asian (9,29%) consumers.

A noteworthy 49,63% of all complaints were lodged by individuals earning between R0 and R80,000 annually. Moreover, 201 complaints were received from those aged between 65 and 75, and an additional 66 from individuals aged between 75 and 85, underscoring the vulnerability of older consumers within the financial sector, says Steyn.

“At the core of the NFO lies a commitment to its values, one of which is to be accessible to all. Accessibility breaks down barriers, welcoming all who seek our assistance, especially vulnerable groups,” says Steyn.

Reflecting on the NFO’s formation, Steyn references a 2017 policy document issued by the National Treasury, which identified the fragmented financial ombud landscape as a barrier to effective consumer redress. The document advocated for the establishment of a single, harmonised ombud scheme, particularly aimed at assisting consumers with limited financial literacy and those residing far from urban centres.

According to Steyn, a 2021 diagnostic report by the World Bank Group echoed this call, recommending enhanced coherence and governance across the ombud ecosystem. The objective was not only to resolve disputes but to promote public trust through transparency, impartiality, and consumer-focused operations. The release of the National Treasury’s policy position in February 2024 marked a turning point, proposing the integration of four long-standing ombud offices into a unified framework grounded in the principles of fairness, accountability, and respect, she says.

“And so, the NFO was born – not just from legislation or regulation, but from shared purpose. The NFO did not simply merge organisations, it merged principles: a belief in accountability, in respect, in fairness, and in the right of every person to be heard. These values are not painted on our walls; they are the lens through which we interpret every case, every complaint, every question we must answer. As we look ahead, we remain mindful of the road still to be travelled. We must now earn the confidence of consumers and industry participants alike – not just through efficient processes, but through principled action,” Steyn says. In concluding remarks, Laher reiterates the centrality of independence in the NFO’s operations and mandate.

“A key attribute of the NFO is independence, which must be visibly objective, impartial, and unbiased. This speaks to not only independence from the financial industry but also from government. In its first year, the NFO has discharged its mission to provide an efficient platform, driven by fairness and independence, within the free alternative dispute resolution regime in South Africa," he says.

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