FINE Annual report 2023

1. Conciliator of disputes

FINE's role as a pioneer in alternative dispute resolution was strengthened. We received a record number of contacts, and the need for our expertise was on the increase. We dealt with nearly 11,000 contacts. The biggest increase was in insurance. In banking, the number of contacts remained broadly at the same level as in the previous year but, on the other hand, the cases were more challenging. In investment, the situation remained stable.

The cases we deal with are often increasingly complex: the world is undergoing rapid digitalisation, and the problems are more extensive and diverse. This is reflected in customer contacts, which, in addition to the actual subject matter question, often also include questions of a general nature concerning services. That is why it is important for us to continuously develop our operations and expertise.

Our aim is for FINE to represent the strongest expertise in the field. Monitoring and anticipating changes in the operating environment and actively responding to changes will be even more important in the future. Fortunately, we have a highly knowledgeable and committed staff, and our complaints boards include top experts from service providers, the judiciary, public authorities, universities and consumer organisations.

Personally, I have been able to observe FINE's activities from the CEO's point of view for over a year now. During this time, my perception of a reliable, independent and genuinely caring organisation has only grown stronger. FINE's work is of great societal importance in promoting good practice in the financial sector and empowering customers. At FINE, we serve customers, financial service providers and a wide network of stakeholders.

An effective and independent alternative to litigation

Throughout FINE's more than 50 years of history, the cornerstone of our operations has been to benefit the customer. We provide help with insurance and financial issues free of charge, quickly, efficiently and out of court. We are an impartial and independent expert organisation, trusted by service providers, as well.

Customers appreciate the personal service they get from FINE: we are easy to reach by phone or other channels. In many cases, when people approach us, the issue is difficult and multifaceted. The problem is usually caused by a negative experience, and the situation is unique to the customer. It is important for people to feel that they are heard and treated fairly.

Often, FINE's role is to act as a conciliator, for example between an insurance company and a customer. Of the customer contacts we received last year, 90% of cases were resolved through advice aimed at reconciliation. It is perhaps fair to say that our role as a dispute resolver and mediator grew in importance.

Our work helps individual citizens, but it also has a wider societal impact. FINE's advisory and dispute resolution model saves consumers, businesses and society time, effort and money. Our independence ensures that customers are generally more likely to accept FINE's advice and interpretations than those of banks or insurance companies – even when the interpretation is the same as that of the service provider.

The customer can be confident that issues will be resolved

The year 2023 was the first year of our new strategy. In this annual report, we summarise our main findings on the topics of counselling and dispute resolution.

Although each customer case is unique, many themes recur in the contacts. In banking, for example, the number of cases involving scams and card fraud continued to rise. The current rules on money laundering provide protection, but also create situations that are difficult to resolve for customers, service providers and dispute resolution providers alike. Some people find it difficult to manage their affairs online, and financial matters are becoming increasingly complex for customers to understand.

We embrace the challenges of digitalisation in the financial sector and respond to customer needs in line with our strategy. We will continue to make sure that people can also reach us in person and that it is easy to do business with us. The broad expertise of our staff, as well as a good working atmosphere and maintaining well-being at work, are important to us. We will continue promoting the development of best practices in the financial sector. To this end, cooperation and smooth communication with the various stakeholders is of paramount importance. FINE also contributes to the drafting of legislation in the financial sector. Our approach is internationally recognised and serves as an example to others.

FINE has a strong mentality of innovation and openness. Going forward, we want to continue to be agile in helping our customers within the framework of the law. We have a strong culture of accountability, and we do not shy from addressing difficult issues, always respecting the parties involved. Customers can be confident that their issues will be resolved at FINE. My appreciative thanks to the FINE staff for this!

We also see in our work how service providers are increasingly focusing on customer service when developing their digital services – even if it doesn't always seem that way to customers. I feel that we are moving in the right direction in the sector in general.

Our work is based on mutual trust and a strong commitment by the parties to respect our judgment. I would like to thank the service providers and other partners, such as the authorities, for their cooperation.

Helsinki, 26 March 2024

Anu Koskenvuo
CEO

2. Working for awareness and impact

FINE's core work is helping customers: providing advice and resolving disputes in banking, insurance and investment matters. We investigate the customer's case free of charge and, if necessary, negotiate it with the bank, insurance company or other service provider. We handle disputes and provide recommendations for their resolution, which have been well followed by the financial sector. However, we do not work alone. We work together with the whole financial sector, so half of the credit belongs to our stakeholders, with whom we work to promote and develop the best practices in the financial sector.

The year 2023 was the first year of our new strategy period, 2023–2025. The vision for this strategy period is to be visible and impactful. Visibility refers to publicity, recognition and visibility both in society and in the media. It can be achieved through effective and impactful work.

The vision "visible and impactful FINE" was extensively pursued in the news coverage. Visibility was boosted by the presence of FINE experts in around 250 news stories. Our experts were interviewed mainly on topics related to insurance and claims, but also on banking issues, especially scams. FINE's role as an advisor and mediator was strongly conveyed in the media. News coverage included interest rate hedging, scams, accidents, and various types of insurance claims. Opinions and statements were also issued on natural disasters, pharmaceutical injuries and the promotion of economic literacy. 

The number of visitors to the website increased by 30%. The website was accessed about 370,000 times. The most searched for topic on the website was information about recommended resolutions, but visitors were also interested in guides, podcasts and FINE's activities.

The increase in the number of visitors to the website is certainly at least partly due to the work done to make FINE easier to find. This has been done, for example, with the help of search engine optimisation.There is also a clear need for independent information.

For discoverability, it is important that banks and insurance companies refer customers to independent advice and dispute resolution through redress.

Awareness was also boosted by FINE's IhanFINE (JustFINE) podcast series. Its eight episodes covered topics ranging from identifying internet scams to the compensability of slip-and-fall accidents and managing insurance and banking affairs for an estate. In particular, the episodes highlighted the issues that customers should pay attention to when choosing insurance cover and managing their banking affairs.

FINE's webinars on problem areas in liability insurance and motor insurance developments, as well as a seminar on strengthening practical cooperation and smooth processes, reached a wide audience of company experts.

Mission: good practices

FINE's mission for the 2023–2025 strategy period is to promote the development of good practices and customer empowerment in the financial sector. The organisation's activities and their impact were studied through a stakeholder survey, customer feedback and a staff survey.

Respondents to the stakeholder feedback survey consider FINE to be a competent, independent and cooperative dispute resolution service that benefits customers. FINE communicates its activities sufficiently and openly, and its activities are considered effective and objective. Areas for improvement included increasing visibility and awareness, especially among customers, and speeding up dispute resolution.

Customers who responded to the customer satisfaction surveys gave positive feedback, particularly on the friendliness, impartiality and clarity of customer service. They would like faster processing of their cases and information on the progress of the processing.

The results of the personnel survey aimed at FINE staff, which have been good in the past, now improved even further. As a proof of this, in autumn 2023, we were honoured with recognition as one of the Most Inspiring Workplaces in Finland. This reflects the commitment of staff and the long-term collective development of the organisation. The Most Inspiring Workplaces in Finland award is given annually to the best organisations participating in the Eazy Flown PeoplePower survey.

90% of customer contacts are resolved in counselling

FINE employs 29 people, and its activities consist of counselling, dispute resolution and communication. The core of the work is helping customers: giving advice and resolving disputes in banking, insurance and investment issues.

Customer advice is offered in a variety of ways by telephone, chat and written correspondence. The main aim of the counselling is to identify the client's problem and find a solution. The customers' questions may relate to issues such as insurance claims, scams or investment advice. While customers often want an immediate response on the phone, there are many situations where further clarification is needed before advice can be given.

FINE's experts provide easy-to-understand information on legislation and contract terms. The service is not limited to providing information, but aims to help prevent disputes and find amicable solutions between the parties. Thanks to counselling, hundreds of contentious cases can be resolved. As many as 90% of customer contacts are resolved successfully in the counselling phase.

In most cases, the service provider's decision is perfectly appropriate, and the customer can accept it after receiving an expert assessment of their case from FINE.

If the customer's case cannot be resolved through counselling, FINE may settle it through dispute resolution, using either the office procedure or the complaints board procedure, and issue a written recommendation for resolution.

Influencing and collaborating

An important part of FINE's activities is to promote financial literacy and to contribute to the drafting of legislation by giving opinions and participating in working groups.

During 2023, FINE continued collaboration with a wide network of stakeholders on a number of projects, with the ultimate aim of increasing people's knowledge in insurance, banking and investment matters. We helped to organise the Talousguru (Financial Guru) competition for secondary school students and participated in the Financial Literacy Advisory Board. We produced content for the information materials on guardianship and death in the family, coordinated by the Digital and Population Data Services Agency, and for the Omissa Käsissä campaign, as well as updating our own materials on these matters.

We retained good contacts and strong participation at international level, both in the European Commission's FIN-NET Steering Committee and in the global International Network of Financial Services Ombudsman Schemes (INFO Network).

In addition, we contributed to the drafting and development of legislation in various ministries, the preparation of EU directives and official guidance by submitting opinions and written comments, and by participating in working groups and consultations. We expressed our views on issues such as: out-of-court dispute resolution, the adequacy, availability and quality of basic banking services; the organisation of activities to comply with sanctions regulation and freezing orders; the amendment of the law on share savings accounts; the amendment of the ADR directive and the repeal of the ODR regulation; the small claims procedure; investor protection; the provisions on fraud; the framework for the use of financial data; and the single currency package.

Customer contacts

3. Cybercrime is here to stay

Banking-related customer contacts with FINE have increased in recent years, mainly due to an increase in scamming and phishing cases. There were less than 200 contacts of this type in 2020 and more than 500 in 2023.

The majority of online incidents reported to FINE are phishing incidents based on fake websites.

"Phishing is when a customer thinks they are logging into an online bank or government service, for example, but in reality the information they enter on a fake site ends up in the hands of criminals. The victim may have landed on the fake website through a search engine or through a link in a text message or email fraudulently sent in the name of a genuine operator," explains Tuomas Hidén, Head of Division at FINE.

Phishing attempts can be so sophisticated that victims may not notice anything out of the ordinary. It may even take some time for the victim to discover that funds have disappeared from their bank account, and they cannot tell when and where the phishing took place.

"Being a victim of a scam is a traumatic experience for most customers. Their emotions range from shock to disbelief, grief and anger. Many also feel ashamed for falling for a scam. The amounts lost to scammers have ranged from a few hundred to tens of thousands of euros, up to a hundred thousand euros, which may have spelled financial disaster for the customer."

First, contact the bank

In scam cases, the first thing customers should do is contact their own bank.

Head of Division Tuomas Hidén points out that it is of paramount importance for banks to invest resources in the handling of customer complaints. Complaints should be processed as quickly as possible, and efforts should be made to ensure that customers receive a proper and well-justified decision on their complaint.

A customer who is dissatisfied with a bank's decision can turn to FINE for advice or bring the matter before FINE as a dispute.

Improving trend

Although the number of disputes has increased, the trend has shown signs of improvement this year. The Banking Complaints Board has issued rulings and guidelines on the misuse of payment instruments online, which has helped to avoid unnecessary disputes.

Several operators and the entire financial sector, including FINE, are working hard to prevent scams.Efforts are being made to teach people how to recognise scams. At the same time, advice is given on what kinds of messages should be ignored.

FINE's guides "Scam detection and FINE resolution procedure (published in Finnish) Huijausten selvittäminen ja ratkaisukäytännöt FINEssä and "How to spot a scam" (published in Finnish) Miten tunnistat ja vältät huijauksen provide useful information on scam-related issues. The podcast (published in Finnish) "JustFINE" IhanFINE  delves into the identification of online scams and instructions on how to proceed if you get scammed. The FINE counselling team answers customers' questions free of charge.

4. When taking out a loan, financial literacy is key

As the economic situation deteriorates, people often become more cautious and careful in their financial affairs. 

In a tighter economy, they may be more cautious in their use of money and take a closer look, for example, at the content and cost of their insurance cover.This is also reflected to some extent in the content of contacts with FINE. 

Last year, the rise in interest rates was mainly reflected in the number of contacts about interest rate hedging on loans. Many customers were unsure about the impact of rising interest rates on the monthly instalments due, especially on annuity loans, and how interest rate hedging works in such a situation. Some customers had been led to believe, on the basis of marketing information, that a rise in interest rates would not affect the monthly instalments to be paid.

"This highlights the need for financial literacy," says Elina Antila, Communications Manager at FINE. She points out that borrowing can be a useful tool to achieve financial goals, but it requires careful planning and consideration.

"Customers should understand the terms of the loan, be able to assess their own financial situation, and ensure that the loan can be repaid even if their circumstances change. When it comes to financial matters, customers' decisions can affect their lives and finances for decades to come."

Verbal negotiations can pose challenges

The importance of financial literacy is highlighted, for example, in situations where you are about to take out a large mortgage for the first time and the negotiation is verbal. You should understand things at once and be able to ask questions and clarify things that are not clear. 

Conflicts may arise over what was actually agreed. Customers trust the professional providing the service and think they understood what was said, although in reality it may have remained unclear. 

Therefore, before taking out a loan, the customer should receive clear and easy-to-understand information on the terms of the loan, including repayments, interest rates, charges and other matters affecting the loan. It is equally important that the customer carefully studies the information received and asks for more information if there is something they do not understand. The same applies, of course, to other banking and insurance matters.

Elina Antila points out that the growing number of offered financial services also necessitates better financial literacy. Products and services are intensively marketed, but they are difficult to compare. Replacing a personal service with online services creates difficulties for some customers. In particular, solving problem situations without a personal service can be difficult.

FINE contributing to better financial literacy

In addition to giving advice and resolving disputes, FINE's mission is to increase customers' understanding and skills in banking, insurance and investment matters. This task is written into the FINE statutes and is also reflected in our mission statement. The aim is to promote customers' interest and confidence in financial activities, improve consumers' financial literacy, and otherwise improve day-to-day practices in the financial sector.

The task is a challenging one. In the light of current research, the financial literacy of Finns is very close to the international average. The data comes from the Organisation for Economic Co-operation and Development's (OECD) 39-country International Survey of Adult Financial Literacy. Finland is well above the average for all countries in digital financial literacy.

"Financial literacy and digital skills must be developed hand in hand. In order to be able to use financial services, you usually need to have good digital skills," says Elina Antila.

In the field of insurance, financial literacy means being able to choose insurance according to your needs, and understanding what insurance covers and what it does not. In banking and investment, it translates into making wise saving, investment and borrowing decisions, managing your finances in a balanced way, and being prepared for changes in the operating environment.FINE helps customers in these areas by producing a range of materials, guides, podcasts and news for the media. This work is carried out together with a wide network of stakeholders.

"With good financial skills, you can better manage your finances and make informed decisions about borrowing, saving, spending and investing. Good financial information helps you make smart and sensible decisions about spending, such as buying a home, investing and planning for retirement," Elina Antila points out.

5. Increase in contacts concerning money laundering and due diligence

During 2023, there was an increase in the number of contacts received by FINE concerning the sudden suspension of a customer's banking services. In the past, customers contacted FINE about the need for banks to ask their customers questions about issues such as political influence. Now, the contacts increasingly concern the limitation or termination of a customer's services.

"With regard to banking services in particular, FINE has received a lot of contacts on these issues, recently almost daily. The customer's bank account may have been frozen or a payment stopped," says Tuomas Siirala, Senior Legal Counsel at FINE.

For insurance, such contacts have been less frequent in the past, but they, too, seem to be slowly becoming more common.

The effect of anti-money laundering laws

Customers contact FINE when their banking services have been terminated or restricted. 

If a bank or insurance company is unable to take the steps required to know the customer, it may be obliged to refuse to carry out a transaction or maintain the business relationship at all. In practice, this means, for example, refusing to make transfers without further information, freezing a customer's account funds, or terminating an insurance contract or a contract for non-basic banking services.

Tuomas Siirala explains that the actions of a bank or insurance company are usually motivated by anti-money laundering and counter-terrorism laws, which require banks and insurance companies to know their customers. This obligation applies for the entire duration of the customer relationship.

"Compliance with the law is particularly important in the current situation of war in Europe and the need to effectively prevent sanctioned entities from doing business."

Service providers must obtain sufficient information to assess the risks associated with the customer relationship and to determine the customer's individual level of risk. If necessary, information must be obtained on, among other things, the origin of the funds. In practice, this leads to the need to ask questions of the customer. The situation will not be resolved until the customer answers the service provider's questions.

The situation becomes more difficult when the answers to the questions are not sufficient and services are restricted or terminated altogether.

"When the use of an online banking ID is prevented, it becomes impossible to manage many daily affairs. The problem is exacerbated by the fact that the current regulation takes little account of the possibility that a well-intentioned restriction or termination of services may, in individual cases, be excessive or completely unjustified," Siirala says.

For example, if a dispute arises over the termination of services, the question is whether there were proper grounds for the termination. However, in the case of suspected money laundering, the law does not allow the service provider to disclose the suspicion to the customer. This means that the service provider cannot justify, for example, why the insurance contract has been terminated at the end of the insurance period.

"In such a situation, FINE or another dispute resolution body may also have no way of knowing the real reasons for the termination. As it is, it may be impossible to reliably assess whether the termination was justified, which may result in FINE not being able to process the case at all or otherwise assist the customer."

Right now, because of the stricter regulation on money laundering and counter-terrorism and updated guidelines from the supervisory body, FINE is receiving quite a lot of cases related to money laundering and customer due diligence.

"Financial services companies are complying more closely with legislation and guidelines, which is a good thing," says Tuomas Siirala.

He says that among service providers, these issues are gradually becoming part of normal customer service. This also means that problematic situations can usually be resolved quickly and smoothly, without unnecessary interruptions to services.

The problems faced by financial consumers are essentially linked to legislation and guidelines from the authorities. This issue is currently under discussion in the EU, where the so-called money laundering package aims to reform and clarify the regulation on money laundering. FINE, as an expert organisation, has participated in the drafting of the legislation.

"It is to be hoped that the new regulation will also take better account of the position of the ordinary financial consumer," Siirala says.

6. Health insurance gains popularity – it's important to stay informed

In recent years, there has been a clear increase in the number of contacts with FINE concerning health insurance. Last year, 697 health insurance contacts were made, compared to 493 in 2022 and 356 in 2021.

Growth can be seen both in health insurance covering medical expenses and in other health insurance, such as disability insurance.

"Part of the increase is due to policy terminations and premium increases, which have been the subject of an increasing number of enquiries to FINE's advisory service. In a typical termination situation, a certain insurance stock has become unprofitable for the insurance company. Companies often offer customers a new policy to replace the terminated one. It may differ from the old insurance in terms of conditions and fees," says Kaisa Laine, Head of Division.

Enquiries to the FINE advisory service include whether the insurance company has the right to cancel a policy, or whether the customer has other options than to take out a new policy.

However, most of the health insurance contacts that come to FINE concern compensation issues.

For policyholders, financial literacy is key

If you are taking out a completely new insurance policy or need to take out a new one after the old one has been terminated, financial literacy is a must. 

"Financial literacy involves being aware of risks and weighing up what risks you can bear with your own wealth or the support provided by society, and what risks you might want to insure," Kaisa Laine explains.

Personal insurance always covers the financial risk associated with a change in health: the cost of treatment for an illness or injury, loss of earnings due to incapacity for work, permanent disability, the financial consequences of a serious illness or the financial losses caused by the death of a family member.

Laine points out that when choosing insurance cover, you should carefully read the sales material. Insurance needs are individual, which is why it pays to compare the contents of insurance policies.

”No two policies are the same, and you should never buy insurance on the basis of the name alone – it doesn't tell you anything about the contents of the policy. In particular, it is worth reading the insurance terms and conditions to find out what is covered and what is not, so that there are no surprises later on about the coverage," says Laine.

The health declaration must be completed carefully – it does not pay to cheat

In recent years, disputes concerning the policyholder's or insured's obligation to provide information have occupied the FINE Insurance Complaints Board more than before. The obligation to provide information means the duty to provide correct and complete answers to the questions asked by the insurer in connection with an insurance application.

If the insured has provided false or incomplete information, and the correct information would have been relevant to the insurer's decision on the choice of liability, the policy may be cancelled or an individual exclusion clause may be attached to it.

Most of the disputes that come before FINE concern these issues. Then it needs to be determined whether the insured was negligent in providing the information, the degree of negligence, if any, and whether the insurer was entitled to cancel the policy, make changes to it or recover any compensation previously paid.

"It is therefore very important to complete the insurance application and health declaration honestly and in detail," Kaisa Laine emphasises.

On the other hand, insurance companies have a responsibility to ensure that the questions asked in the health declaration form are clear and unambiguous enough to make it as easy as possible to give correct and complete answers. This will help curb the increase in the number of disputes relating to the granting of personal insurance.

Insurance policy cover is not always what the customer expected

Last year's customer contacts included questions concerning various health insurance compensation issues. Customers wanted to know whether a certain treatment, for which compensation was claimed, is in line with generally accepted medical opinion, meaning established medical practice, and whether the insured was incapacitated in the way required for coverage.

"Treatment disputes reflect customers' high expectations of the insurance they take out. For example, people want quick access to treatment, the possibility to continue their sporting activities without interruption, or the continuation of an established doctor–patient relationship. Many assume that insurance will give them faster access to treatment and better or more comprehensive care,” Kaisa Laine says.

She says it comes as a big surprise to many of the insured that the insurance does not cover all the proposed treatment: an operation or procedure may not be considered a necessary treatment under the terms of the policy.

Disputes concerning incapacity for work typically involve cases where the treating physician has assessed the customer to be completely incapable of their usual work, but the insurance company considers that the medical reports do not show a functional deficiency that causes complete incapacity for work. In this case, the insurer usually refuses compensation. The required degree of incapacity for work is indicated in the terms and conditions of the insurance policy, along with the deductible and maximum benefit period.

In recent years, contacts concerning disability insurance have focused particularly on mental incapacity for work, that is, the length of the period or the degree of incapacity for work due to mental health problems. Insurance for temporary incapacity for work always has a maximum benefit period for the entire policy period. The maximum benefit period available may vary from insurer to insurer and may affect the premium.

Claims disputes are resolved at the FINE office and the Insurance Complaints Board. Typically, FINE will obtain an expert medical opinion for the processing of the case. 

Contacts regarding Health insurance

Concluded disputes, ADR