Fed Up Fintechs Call for an Overhaul of the Flailing Financial Ombudsman

UK fintech’s drag factor isn’t application or acceleration; it is the appeals and the process of financial disputes.

Our report, Fed Up of Complaining, says the Financial Ombudsman Service (FOS) risks throttling the very best of the tech sector the UK loves to champion. It does so through inconsistent judgments, lumbering complaint timelines, and a lack of transparency to boot, affecting both fintechs and UK consumers. If the UK is to continue to punch above its weight in fintech and financial services more widely, this significant blocker to success needs urgent change.


The report highlights major room for improvement at the FOS:

Financial dispute complaints often drag on for months, even years, leaving consumers and companies in the lurch.
Its unpredictable rulings and disproportionate fees stifle innovation before it gets a chance to take.
FOS rulings that operate in regulatory grey-areas set precedents, with no grounds to appeal and limited FCA oversight.


That’s why the report provides a three-point rescue plan:

Introduce a multi-track case categorisation system to speed up the simple cases and open up resources for the complex ones.
Set a formal precedent system and FCA oversight specifically for complex cases to prevent scope creep and ensure today’s decision isn’t tomorrow’s U-turn.
Implement a customer-facing digital portal for live updates, two-way communications, and no offline paper chasing.

The report warns of what’s at stake thanks to the impact of FOS inefficiency. For consumers, prolonged limbo causes financial and emotional stress, while inconsistent judgments undermine faith in the system. For businesses, unpredictable decisions and disproportionate case fees cause overly cautious behaviour, potentially raising costs for all consumers.