A growing shift in South Africa’s financial regulatory environment is placing consumer outcomes at the centre of how financial institutions are supervised. Insights shared during The Ombud Lens panel discussion highlighted how complaints and redress data are becoming powerful tools to identify conduct risks earlier, strengthen consumer protection and build greater trust between financial institutions and the public.
At its core, the discussion emphasised a move toward a more outcomes-based, data-driven regulatory framework, aligned with the upcoming Conduct of Financial Institutions (COFI) Bill. This shift signals a broader effort to ensure that financial services genuinely serve the needs of consumers and that emerging risks are identified before they result in widespread harm.
Importantly, the conversation also highlighted how improved consumer protection contributes to stronger households, greater financial stability and improved decision-making — factors that are relevant to individuals and households navigating financial responsibilities, long-term planning and economic security.
Financial decisions often shape long-term family stability, and when consumers have access to transparent products, fair advice and effective dispute resolution mechanisms, confidence in the financial system grows.
Complaints Data as an Early Warning System
Traditionally, complaints were viewed mainly as records of disputes after harm had occurred. Increasingly, however, regulators and Ombud structures are recognising complaints as early indicators of deeper conduct risks.
Patterns in complaints can reveal:
- product design flaws
• misleading advice
• gaps in financial literacy
• poor communication practices
• emerging fraud trends
• vulnerabilities affecting consumers under financial pressure
Leanne Jackson, Chief Ombud and Chief Executive Officer of the Ombud Council South Africa, highlighted that complaints data should not only be used to resolve individual disputes, but should also be analysed to identify patterns that may indicate broader conduct risks and consumer vulnerability.
Structured complaints insights allow regulators to identify root causes of harm and strengthen fairness across the financial sector.
Using complaints data analytically allows regulators to identify risks earlier and intervene proactively, reducing the likelihood of widespread financial harm.
From a social impact perspective, this proactive approach helps create a financial system that supports informed decision-making and reduces the likelihood of households falling into debt traps or unsuitable financial products.
For many individuals responsible for family financial planning, insurance protection or investment decisions, clearer products and fairer advice can reduce long-term stress and improve financial resilience.
COFI and the Shift Toward Real Outcomes
The transition toward an outcomes-based regulatory framework under COFI represents a significant evolution in financial supervision. Instead of focusing primarily on compliance paperwork, regulators are increasingly assessing whether financial institutions are delivering fair outcomes in practice.
Seipati Nekhondela, Director of Banking Development at National Treasury of South Africa, emphasised the importance of ensuring that financial regulation focuses on how customers actually experience financial products and services, rather than relying only on technical compliance indicators.
Outcome-based supervision examines whether:
- customers understand the products they purchase
• advice is appropriate for individual circumstances
• product costs are transparent
• risks are clearly explained
• complaint processes are accessible and fair
A more transparent environment benefits both consumers and institutions by improving trust and supporting sustainable long-term relationships.
For individuals managing investments, insurance, retirement planning or education savings, improved transparency helps ensure financial decisions are based on reliable information rather than complex or unclear product structures.
Real-World Insights Informing Policy and Regulatory Action
Examples shared during the discussion illustrate how complaints data is already shaping regulatory priorities.
One key area involves digital banking fraud, where high volumes of complaints related to online scams are being analysed to understand how criminals exploit system weaknesses.
Insights are being shared with regulators to identify:
- where mitigation measures are effective
• where institutions can strengthen safeguards
• where harms may be driven by third parties
Another example relates to debt counselling conduct, where complaints indicate the need for clearer oversight of certain entities operating outside traditional financial sector legislation.
Concerns about unauthorised financial advice are also informing regulatory enforcement strategies, helping authorities identify patterns of misleading conduct that could expose consumers to unnecessary financial risk.
Additionally, complaint volumes relating to funeral insurance products are contributing to discussions on product design and disclosure practices, ensuring products meet genuine consumer needs and provide fair value.
Digital Risks Increasing Consumer Vulnerability
The financial environment is becoming increasingly digital, creating new risks that require both regulatory oversight and improved consumer awareness.
Emerging risks include:
- fake investment platforms
• impersonation scams
• phishing attacks
• cloned financial websites
• social media investment promotions
• crypto-related fraud
• AI-enabled deception including deepfake endorsements
• influencer-driven financial advice risks
Alicia Moses, Manager: Strategic Framework Consumer Education at the Financial Sector Conduct Authority (FSCA), emphasised the importance of financial education initiatives that help consumers better understand digital risks and recognise warning signs linked to misleading investment opportunities.
Public awareness initiatives encourage consumers to:
- verify financial provider registration
• treat guaranteed high returns as warning signs
• be cautious of unsolicited financial offers
• question investment advice promoted on social media
For individuals actively managing investments or seeking ways to grow wealth responsibly, understanding these risks can help protect long-term financial security.
Strengthening the Ombud System
The evolving regulatory framework is expected to broaden the scope of the Ombud system to include additional financial service providers, particularly as financial technology continues to develop.
Expanding access to independent dispute resolution structures ensures consumers have recourse if something goes wrong, reinforcing accountability across the financial sector.
The Ombud system provides an accessible mechanism for resolving disputes without requiring costly legal action.
Complaints as Strategic Intelligence for Financial Institutions
Financial institutions are increasingly encouraged to view complaints not as reputational threats, but as valuable feedback that can improve products, services and communication.
Effective complaints management can:
- identify product weaknesses
• improve customer experience
• strengthen trust
• reduce repeat complaints
• support better product design
• improve communication clarity
Financial Literacy as a Social Impact Priority
Financial education plays an increasingly important role in reducing consumer vulnerability and improving long-term financial wellbeing.
Effective financial education should be:
- practical
• measurable
• accessible
• culturally relevant
• available in multiple languages
• aligned with real consumer behaviour
Building a More Trusted Financial System
The discussions during The Ombud Lens highlight a broader shift toward a financial system that prioritises fairness, accountability and transparency.
Using complaints data proactively allows regulators and institutions to prevent harm, improve product design and ensure financial services better support real-world needs.
Stronger consumer protection contributes to:
- more resilient families
• improved financial decision-making
• greater trust in financial institutions
• reduced exposure to harmful products
• stronger economic participation
As South Africa’s regulatory environment continues to evolve, collaboration between regulators, Ombud structures and financial institutions will play a key role in building a financial system that works more effectively for everyone.
