Financial Sector Receives 2.3 MLN Complaints Over Last 5 Years -- BNM

KUALA LUMPUR, Jan 17 (Bernama) -- The financial industry received around 2.3 million complaints over the past five years, 98 per cent of which were related to the banking sector and the rest insurance and takaful-related.

Bank Negara Malaysia (BNM) deputy governor Datuk Jessica Chew Cheng Lian said the number of complaints in recent years was 65 per cent higher on average compared with 2020, reflecting the rising complexities of financial services and the higher level of consumer awareness and expectations. 

“Conversely, complaints lodged with BNM link saw a 37 per cent reduction over the same period. This suggests that ongoing improvements to complaints channels provided by financial service providers themselves are having a positive impact in ensuring that consumers get the help they need, resulting in fewer complaints being escalated to BNM link.

“We expect this number to come down further in line with higher standards of fair treatment that we are setting for financial service providers, including on the management of customer complaints,” she said in her speech at the launch of Financial Market Ombudsman Service (FMOS) here today.

The central bank deputy governor said evidence supporting the lower number of complaints could also be observed from marked improvements in customer loyalty and overall customer satisfaction, as presented in the latest nationwide customer satisfaction survey commissioned by the banking and insurance industry.

Also present at the launch were Securities Commission Malaysia (SC) executive chairman Datuk Mohammad Faiz Azmi and chairman of FMOS Tan Sri Dr Foong Cheng Yuen.

The FMOS is a merger between the Ombudsman for Financial Services (OFS) and the Securities Industry Dispute Resolution Center (SIDREC) and serves as a centralised dispute resolution centre for financial consumers and investors nationwide.

The joint oversight by BNM and SC will help FMOS operate more effectively by aligning regulatory standards while safeguarding the interests of consumers, investors and the financial industry. 

In line with the functions of OFS and SIDREC, FMOS serves as an alternative to the judicial system through the provision of independent and impartial mediation and adjudication services. 

The streamlined and consistent dispute resolution process would also enable quicker and transparent resolutions for consumers and investors.

In a statement, BNM governor Datuk Seri Abdul Rasheed Ghaffour said the establishment of FMOS reflects the ongoing commitment of the central and the SC to enhance the efficiency and effectiveness of dispute resolution services. 

“This initiative not only strengthens consumer confidence but also reinforces the integrity and accountability of financial and capital market service providers, ultimately contributing to a more robust and trusted ecosystem,” he said.

According to Mohammad Faiz, FMOS simplifies the resolution process for financial consumers and investors by providing a trusted one-stop platform, which is especially important as the lines between financial and capital markets blur. 

“FMOS also promotes consistent standards and decisions, strengthening trust in the system,” he said.

Meanwhile, Chew said FMOS helps to redress this imbalance by providing an avenue that is independent, fair and transparent for aggrieved financial consumers to resolve their disputes with financial service providers. 

“In recent years, about a quarter of the regulatory standards that we issue are focused on conduct matters. This reflects our efforts to continuously raise the bar on how we expect financial institutions to ensure that they deal fairly with their customers. 

“A notable example in the more recent period has been the revised policy document on fair treatment of financial consumers issued in 2024, where we introduced a new principle and specific requirements for financial service providers to consider and respond to the interests and needs of vulnerable consumers in conducting their business and operations,” she said. 

Chew said that the central bank is also in the process of revising the complaints handling guidelines to reflect improvements to ensure that complaints handling mechanisms of financial service providers remain effective and responsive in dealing with issues faced by consumers.

“We have long maintained that the first step in resolving disputes must begin with financial service providers. Our work suggests that a customer’s experience in how their complaints are handled can have a powerful effect on engendering trust. 

“A fair and sensitive approach to dealing with complaints can not only help financial institutions build enduring customer loyalty and trust but also offer valuable insights to improve their product and practices,” she said.

In cases of fraud and serious misconduct, Chew said BNM would not hesitate to take strong actions in collaboration with other law enforcement agencies to hold perpetrators to account, including barring individuals from working in the financial sector.

Recognising the increased trend of the average value of financial transactions by consumers, BNM said it had streamlined the monetary limit for eligible disputes involving financial accounts or transactions to RM250,000. 

“This limit broadens the scope of protection, ensuring that more consumers can access free dispute resolution services. This is consistent with the existing eligible monetary limit for disputes involving investment accounts and transactions offered by capital market service providers regulated by the SC. 

“The change aligns with FMOS’s commitment to adapt to the evolving financial landscape, where transactions or account values may be higher,” it added.

-- BERNAMA