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CIO interview: Nicola Wadham, Financial Ombudsman Service

CIO Nicola Wadham brings Computer Weekly up to speed on the Financial Ombudsman Service’s IT challenges and successes

The Financial Ombudsman Service (FOS) and its 4,000 staff are embarking on a digital transformation journey as the 20-year-old dispute resolution service faces an increasing workload.

About one million contacts are made with the service each year – when consumers have issues with a finance product or financial service provider, it is FOS that settles things between the parties involved.

All cases have to be carefully documented and investigated, which makes FOS a people- and document-heavy organisation. But while only experienced humans can investigate cases, technology is playing an increasingly important role in improving access to the service, storing and retrieving information, as well as managing the workforce.

The FOS has been central to resolving the disputes around Payment Protection Insurance (PPI) products and the misselling of them. It was the PPI scandal that led to the organisation growing rapidly, from about 300 staff when it was formed in 2001 to 4,000 today. And it was this workload that led the organisation to switch from paper-based processes to its first in-house-developed case management software, built on a SQL server.

With PPI disputes now coming to an end, it might be understandable for the organisation to scale back, but the financial technology (fintech) revolution makes its services more important than ever. The huge volume of new finance products arriving on the market, from a plethora of new companies, risks the finance sector becoming a minefield for both consumers and the businesses that sell financial products to them. Just as PPI forced FOS to transform, the fintech boom is pushing it further.

Raising the profile of tech

When the Financial Ombudsman Service’s CIO, Nicola Wadham, joined the organisation two years ago, she was recruited for a relatively newly created role, tasked – along with her 180 colleagues in the IT department – with “elevating the role of technology in the organisation”.

Her time at Scottish and Southern Energy, where she held divisional CIO roles and ran large call handling contact centres and technology, stood Wadham in good stead for the challenge at the Financial Ombudsman Service.

“We have about half a dozen projects ongoing that are migrating some of our on-premise stuff to the cloud, including our enterprise data warehouse and our document management system”

Nicola Wadham, Financial Ombudsman Service

The digital transformation was already underway when she joined, with the service having implemented Microsoft Dynamics as its main transaction system just before her arrival. Under Wadham’s leadership, the FOS IT team has since rolled out Workday’s cloud based HR, finance and payroll systems to replaced 14 different legacy systems.

The implementation, which took almost exactly a year to complete, is a great step in the digital journey, according to Wadham. “I am so pleased we are now on a single, integrated platform,” she says.

This is part of the organisation’s move to the cloud, which is well under way. “We will be out of our datacentres by November next year,” says Wadham. “We have about half a dozen projects ongoing that are migrating some of our on-premise stuff to the cloud, including our enterprise data warehouse and our document management system.”

Most of the organisation’s 4,000 staff work in dispute resolution, settling issues between financial services firms and their customers.

“They handle large numbers of contacts coming in from customers of financial services firms, mainly by telephone and post,” says Wadham. “They use the CRM [customer relationship management] system to log information about the complaint and gather information from the respondent financial services business, who are also our customers.”

Changing responsibilities

Despite its PPI dispute resolution work coming to an end, the Financial Ombudsman Service’s general casework is increasing, partly as a result of fintech and new products, says Wadham.

“The real impact of fintech is that the products are more complicated and can be launched quickly, so we have to understand them,” she says.

One of the FOS’s roles is deciding who is responsible for losses resulting from authorised push payment (APP) scams. Through a voluntary reimbursement code, banks are instructed to reimburse victims of APP fraud, which occurs when criminals use fake websites and emails to trick consumers into authorising payments to them.

Figures from consumer rights organisation Which? show that the FOS is receiving a growing number of complaints from consumers who are not being reimbursed. Between 2020 and 2021, complaints increased from 3,600 to 7,770. The FOS has overturned more than 75% of decisions referred to it by consumers after banks refused to pay them back for losses to APP scams.

“This shows the influence of an organisation like ours, when it takes a view on how it will treat a particular topic and businesses in the industry take notice,” says Wadham.

Digital directions

With disputes on the rise, it is important that consumers can easily access the organisation’s services. To this end, Wadham has instigated the development of a digital channel.  

“We are in the process of procuring a partner to deliver a digital channel next year,” she says. “We currently have one million contacts a year and we want to drive accessibility and make ourselves available to everyone.”

Beyond managing the huge caseload, the FOS has to manage its people, who are in effect its product, as dispute resolvers. “We are a people-intensive business with staff who apply their thoughts to problems, so it is important that we recruit the right people and manage them. Workday allows us to do far more sophisticated workforce planning.”

Technology is also being developed to support the service’s people in doing their work, with artificial intelligence (AI) being applied to spot patterns in the customer complaints they receive.

“We are using AI to help us look for patterns in the data that we would otherwise find too difficult because it would take too long manually,” says Wadham. “This could give us insights into new products and the patterns around that, so we get an earlier indication.”

Catching potential issues early could help FOS achieve its mission, which is to have no complaints at all.

Flexibility and diversity

Wadham is also implanting diversity in her team. For example, about a third of the FOS’s 180 IT staff are women. “It is also a very diverse team, which I am very proud of,” she says.

And it is not difficult to increase the number of women in IT, according to Wadham. “If you have a senior woman in IT, they appoint women,” she says.

Flexibility is also a goal for Wadham. The IT team at FOS has been working fully remotely since the Covid-19 pandemic forced organisations to introduce remote working policies almost overnight. The Financial Ombudsman Service was quick to react.

“We were able to create extra capacity very quickly for remote working,” says Wadham. “Within a couple of weeks, we got everybody working at the same volume as when they were in the office.”

She says there are plans to begin moving back to the office in Tower Hamlets, London, depending on government guidelines.

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