University College cork

Impact of Big Bang

Summer Project

By Anup Ranjan Das

8/13/2015

The aim of the study is to examine the concept of soft law and its effectiveness to explain the Impact of Big Bang

TABLE OF CONTENTS

Pg.No

1) Background............................................................................... 1

a) Introduction to Financial Service Ombudsman.................... 1

b) Complaint Handling Process................................................. 2

2) Literature Review...................................................................... 5

3) Data........................................................................................... 9

4) Hypothesis Testing.................................................................... 15

5) Trend Analysis........................................................................... 21

6) Conclusion................................................................................. 27

7) Bibliography............................................................................... 28

8) Appendix-Data........................................................................... 30

Background:

Hard power has been the traditional form of policy governance tool throughout the world, but in 21st century soft power has been emerging according to some scholars.

With this report I will look at soft power with special significance to the “Name & Shame powers” provided to Financial Services Ombudsman bureau (Ireland) (post 1st September 2013) often quoted as the “Big Bang”. The FSOB (Ireland) is the first financial services ombudsman bureau in the world to receive such powers.

Hence the main purpose of this report is to examine the effectiveness of these soft powers provided to FSOB against the financial services providers in reducing the number of complaints received and, improving the customer services practice of these financial service providers post Big Bang.

Introduction to Financial Services Ombudsman Bureau

Financial Services Ombudsman’s Bureau

The Financial Services Ombudsman's Bureau is the corporate entity of the statutory scheme and consists of the Financial Services Ombudsman and the staff. It is a statutory body funded by levies from the financial services Providers and became operational on 1 April 2005.

The Financial Services Ombudsman is a statutory officer who deals independently with complaints from consumers about their individual dealings with all financial services Providers that have not been resolved by the providers. The Ombudsman is therefore the arbiter of unresolved disputes and is impartial.

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How Complaints are handled:

The complaints are handled by the FSO in 5 phases listed below. The parties involved in the whole process are the Financial services Ombudsman, Financial Service Provider and the Consumer

Figure.1

Figure.1 Complaint Handling Process followed by FSOB

1) Making a Complain

The consumer must complete the internal complaint process before making a complaint to Financial Sevice Ombudsman.The internal complaint process includes making a written complaint to Financial service provider and keeping a copy of the complaint letter.According to the consumer protection code the provider must seek to resolve any complaint with consumer.The Financial service provider is provided with 40 business days (approx 2 months) from the date of the complaint to investigate and resolve the complaint.

If the Financial service provider cannot resolve the complaint,it must inform the consumer the anticipated time frame which it hopes to resolve the complaint and must also confirm that the consumer may refer the case to relevant Ombudsman.The consumer can then make the complaint to Financial Service Ombudsman by completing the complaint form and submitting the relevant documents.

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Making a Complain Assessment Mediation Investigation Adjudication

2) Assessment

After the consumer has submitted the complaint and the relevant documents, a case officer assesses the details.They review the complaint and decide whether the case can be accepted or not depending on the law and jurisdiction.If the case cannot be taken , the case officer will write to the consumer and explain the reason for the same.

3) Mediation

If the compliant is accepted by the Financial service provider, the first step the Financial service ombudsman recommends is mediation.

Mediation is a voluntary, confidential and informal process.The Mediation guidlines are provided by the Financial Ombudsman Services and their trained and accredited mediators assist and guide the discussion.If the consumer and the Financial service provider settle during mediation, the agreement becomes legally binding for both consumer and Financial service provider and the dispute is concluded.However if the mediation is unsuccessful the complaints then go to investigation.

4) Investigation

After mediation has not been successful or has been refused,the Financial service ombudsman assigns an investigator to the case.The investigator drafts a summary of the consumer of the consumer complaint and a list of questions for the Financial service providers to resond to.

A copy of the providers response is sent to consumers and the opportunity to respond to those responses.The exchange of documents continues until both consumer and the Financial service provider have nothing new to add.Then the investigator reviews all the documents and prepares the final decision on the finding.In certain circumstances the ombudsman may decide that there need to be an oral hearing when sworn evidence is required.

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5) Adjudication

When investigation is complete,the Financial services ombudsman issues finding to the consumerand the financial services provider.The outcomes can be:

The findings are legally binding to both consumers and the Financial services provider.If the consumer or the Financial services providers are not satisfied with the Financial services ombudsman findings, either may appeal to High court. Appeals should be made within 21 days after issue of findings.

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Outcomes

Upheld Partly Upheld Not Upheld

Literature review:

1) Soft Power:

According to Collins English Dictionary (2003) the word of “power” has the following meanings: Ability or capability to do something, Political, financial, social etc. force or influence, Control or dominion or a position of control, dominion or authority.

Soft Power on the other hand as described in the words of Nye (Nye, 2004a)

Figure.1

Figure.1: Nye’s interpretation of Soft Power

Earlier versions of Nye’s soft power definition were: “the ability to get what you want through attraction rather than coercion or payment” (Nye, 2004) which included “culture, values and foreign policies” (Nye, 2004, p. 11). Later, Nye extended his definition into “the ability to affect others through the co-optive means of framing the agenda, persuading, and eliciting positive attraction in order to obtain preferred outcomes (2011, p.20-21)” While further developing his concept of soft power, Nye (2002, 2004, 2011) has been focusing on the outcome of soft power. A person is said to have power due to

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Soft Power (Nye,2004a)

The ability to shape preferences of

others (p5)

The ability to get others to want the outcome you want

because of your cultural or

ideological appeal (p11)

A key element of leadership, the

power to attract –to get others to want what you want, to

frame the issues, to set the agenda (Nye,

2004b).

having one of the following attributes or a combination of them: status, authority, reputation, money, knowledge and beauty (Davies, 1991). Individuals such as Nelson Mandela or Mother Teresa have soft power because of their reputation. Management and psychology literature has long promoted the benefits of using referent (soft) power over coercive (hard) power (Cristo, 2005). According to Raven and French (1959), there are five bases of power: reward, coercive, legitimate, referent and expert. Soft power is a kind of referent power that is based on identification and attraction, and yields the greatest influence in relation to the other powers. The thinking behind the concept of soft power can be traced even back to more than two thousand of years. In ancient China, soft power was perceived stronger and more powerful than hard power, as suggested by proverbial wisdoms: to use soft and gentle means to overcome the hard and strong (yi rou ke gang); and drips of water can penetrate a stone (di shui chuan shi). Sun Tse (544-496BC), a military strategist of 2500 years ago, advocates winning a battle without a fight. The Chinese philosopher Confucius (551-479BC) believes that the ruler should win the allegiance of people with virtue (soft power) not by force (hard power). Similarly, Mencius (372-289BC) advocates rule in kingly way (wang dao) rather than the tyrant way (ba dao). The kingly way refers to governing by moral example whereas the tyrant way involves governing by brutal force (Wang, 2006). Lao Tze, a contemporary of Confucius, says in Tao Te Ching, “I know the benefit of wuwei (do nothing); the softest can win the hardest. Invisible force can pass through the intangible.”(Fan Ying, 2008 p.3-4)

Hard Power Vs Soft Power:

Hard Power Soft PowerAbility to change others‟ position byforce or inducement

Ability to shape the preferences ofOthers by attraction

Military and economic power Cultural powerCoercion, force Co-option, influenceAbsolute Relative, context basedTangible, easy to measure, predictable to certain degree

Intangible, hard to measure,unpredictable

Ownership specified Unspecified, multiple sourcesControlled by State or organisations Mostly non-state actors, uncontrollableExternal, action, push Internal, reaction/response, pullDirect, short term, immediate effect Indirect, long term, delayed effectManifested in foreign policies Communicated via nation branding

Figure.2: (Fan, 2008 p.23) comparison of Hard vs. Soft Power

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Advantageously, soft law contains learning effects for individuals and groups that result in improved problem solving strategies for the relevant actors over time (Brummer, 2010). Some scholars argue that soft power is effective and it sometimes reinforces and sometimes interferes with hard power, but in any case, soft power does not depend on hard power (Nye, 2004). Others feel that soft power would be more effective if more money was spent on it (Schneider 2005). Another line of literature feels that soft power is emerging and getting more influential in today’s global information space and it has less hard power support (Chong, 2005).Based on informal agreements, soft law is adaptive in rapidly changing environments (Lipson, 1991) and can accomplish what hard law accomplishes but at a lower cost (Gersen and Posner, 2008 P.594).Nye’s view (2004a) on the relationship between the two forms of power is not very clear. On one hand, he says hard power and soft power are related because they are both aspects of the ability to achieve one’s purpose by affecting the behaviour of others (p7). On the other, he argues soft power does not depend on hard power (p9).Disadvantages of soft law are associated with its very nature: its non binding character and its partially non-specific goals (Karlsson-Vinkhuyzen & Vihma, 2009).Through its soft character in the form of behavioural recommendations, actors might be confronted by ambiguous or even conflicting expectations that leave a challenging scope for interpretation and action.

Soft Power & Big Bang:

What is the “Big Bang”?

New Powers of Financial service ombudsman (FSOB) to publish complaint record of individual Financial services providers (FSPs)

Require complainants to engage with Financial services providers before going to Financial service ombudsman

Soft law regulation in the context of Big bang is mainly represented by “the name and shame powers” provided to financial services ombudsman bureau. The FSOB has long sought the ability to report on the complaint record of individual FSPs. The reason for this has been clear. The FSOB has long had the view that such reporting would lead to an improvement in complaint management by FSPs. To avoid having to report adverse claims, FSPs would settle more claims at an

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earlier stage in the process and take steps to obviate the need for Complainants to have recourse to the services of this office. This hope has been borne out by the complaints trends to this office since the coming into effect of the new reporting powers on 1 September 2013. It has now become clear as to the reason for this significant reduction in the numbers of complaints: the changes in policy and powers of the FSOB in September 2013. The FSOB continues to look to Complainants to engage with FSPs prior to investigating a complaint. Furthermore, FSPs have an added incentive to actively manage their complaints given the FSOB’s power to publish the outcomes of findings in relation to individual FSPs. It is hoped that the publication of such information will continue to drive FSPs to provide a better service, change procedures and policies where possible to obviate the need to complain, and to settle cases at an early stage in the process.

With this report, we see signs that the industry is less reliant on availing of the services of the FSOB to reach a final conclusion. In other words soft power is working effectively for the Financial Service Ombudsman (Ireland).

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Data

Our sample consists of data from all press articles published by Financial Services Ombudsman online. The online publications consist of reports which review the consumer complaint trends on a biannual basis for the years 2010, 2011, 2012, 2013.The data for the second half of 2013 has not been published online and is not available for study.

The complaint trends for the year 2014 have been published on an annual basis as compared to previous year reports.

Structure of Annual Review Report (2014)

Figure.1

Figure.1 The above figure represents the overall structure of Financial Services Ombudsman annual review complaint reports

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FSO Annual Review

Report

Executive Report

Complaint Trends

Complaint Breakdown

By Product & Sector

Managing Complaints &

OutcomesCase Studies

1) Executive Summary The executive summary section of the Annual review report is divided into two parts:1) Reporting on Financial Service Providers2) Reporting on Financial Service Providers by sectors & by product type.

This is a very important section of the report as it represents one of the very important aspects of “Big Bang” or “Name & Shame powers”.

“Section 72 of Central Bank Act 2013, gives FSOB the power to publish reports identifying regulated financial services providers who in preceding years have at least 3 complaints against them substantiated or partly substantiated.”

Hence this section represents names of all FSPs who have complaints against them followed by the number of complaints received by each FSPs sector wise and product wise within each sector.

Classification of sectors by Financial Services Ombudsman Bureau

Figure.2

2) Complaint TrendsThe following section represents all the complaint trends experienced by the financial service ombudsman from 2010 to 2014.For e.g. the new complaints received every year, complaints received per sector, number of active complaints each year etc.This section is discussed in detail in the later part of the report under Trend analysis.

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Sectors Classified by

FSOB

Investment Banking Insurance

3) Managing Complaints & OutcomesThis is the most important section of the report. It describes how all complaints are resolved by FSOB on a daily basis.

Figure.3

Figure.3: The above flow chart represents the complaint resolution methods followed by FSOB

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Complaint resolution methods

Compaints closed by finding outcomes

Upheld

Partly upheld

Not upheld

Complaints closed by settlements and

mediation

Complaints closed for other reasons

Advisory referrals

Decision by FSOB not to investigate complaints

Outside jurisdiction of office

Closed due to no further contact from

complaintant

Complaints withdrawn by complaintant

Complaints closed by finding outcomes:

This includes all complaints which have been investigated by the FSOB. The normal process of investigation has already been discussed in the earlier part of the report. Based on the investigation the outcomes of the complaints maybe classified as-1) Upheld: If the complainant is successful and the FSOB directs the FSP to compensate the complainant.2) Partly Upheld: The complainant is successful in his appeal but the FSP is not entirely at fault hence compensation is agreed upon which less than what the complainant claims in the beginning of the case.3) Not Upheld: The FSOB finds the complaints unjustified and rules the results in favour of FSP.

Complaints closed by settlement & mediation

Every year, the Bureau allocates considerable resources towards facilitating the Complainant and the Financial Service Providers in achieving a mutually agreeable resolution. The FSOB encourage both parties to engage in mediation or alternatively, to explore the possibility of resolving their difficulties by way of direct communications between themselves, which the FSOB facilitates.

Complaints closed for other reasons

Complaints are closed for a variety of reasons following interaction with the Bureau. As detailed previously, complaints are initially examined to ensure that they fall within the legislative jurisdiction and that FSOB are the appropriate body to deal with the complaint. In some cases the FSOB needs to seek further clarification from the Complainant as to the exact nature of the complaint. These are the initial stages of the complaint management process. The full resources of the Bureau are used to ensure that each complaint receives satisfactory attention. There are a number of reasons as to why complaints may not progress and these are detailed below.

1) Advisory referrals – Upon initial investigation the FSOB finds and refers complains to another appropriate body.

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2) Decision by FSOB not to investigate complains – The FSOB decides not to investigate these complains because they feel these cases are more appropriate for the court of law.3) Outside Jurisdiction – The complaints are outside the legal jurisdiction of FSOB4) Closed due to no further contact with the complainant.5) Complaint withdrawn by the complainant.

4) Complaint breakdown by sector and product

This section represents the description of the complaints in detail describing the type of product in each sector. The annual review report divides the products in the following categories in each sector.

Figure.5

Figure.5 complaints received for different product types in Investment, Banking and Insurance sector

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Investments

EndowmentInvestmentsPensions

Banking

AccountsATMCommercialCredit CardForeign ExchangeLendingMortgagesMiscellaneous

Insurance

CommercialCritical/Serious IllnessHospital Cash PlansHouseholdIncome protection & permanent planLifeMedical expensesMobile phonesMortgage protectionMotorPayment protectionPersonal accident policyTravelMiscellaneous

5) Cases:

The final section of the annual review report mentions the landmark cases within that annual year for better understanding of the outcomes and judgements. This section has been further divided into two parts – 1) Cases solved prior to formal investigation 2) Cases solved after formal investigations.

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Hypothesis Testing

Hypothesis testing is the statistical assessment of a statement or idea regarding a population. For a given relevant data, hypothesis testing procedures can be employed to test the validity of a statement at a given significance level. Hypothesis testing procedures, based on sample statistics and probability theory, are used to determine whether a hypothesis is a reasonable statement and should not be rejected or if it is an unreasonable statement and should be rejected.

In our hypothesis testing we will be conducting a two tailed test testing the significance and validity of the data which has been taken from the Financial Services Ombudsman. We have data for number of new complaints received by the Financial Services Ombudsman each quarter from 2010 to 2014.

Summary of Complaints received

Figure.1

Number of New Complaints Received

Year Q-1 & Q-2 Q-3 & Q-4Tota

l % Change from previous year2010 3631 3599 7230 *N.A2011 3780 3507 7287 0.79%2012 3682 4453 8135 11.64%2013 4676 3046 7722 -5.08%2014 N.A N.A 4477 -42.02%

Figure.1: Shows the number of complaints received quarterly from 2010 to 2014.The year 2013 has been highlighted, as the year of implementation of the Name and Shame powers (Big Bang).The data from 2013 has not been included in the hypothesis testing .The 5 th

Column in the above table shows the change in the number of complaints received as compared to the previous year. The average increase in the number of complaints received before big band = 7550.67Std.deviation (Increase in complaints before big bang) = 506.84

*N.A – Data not available

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Hypothesis testing procedure followed

Figure.2

Figure.2: Shows the general process of hypothesis testing

To check the validity we have to

1) Formulate the null hypothesis and the alternate hypothesis 2) Identify the test static for conducting the hypothesis test3) Identify the rejection points for the hypothesis tested at different significance levels 4) Determine whether the null hypothesis is rejected or not rejected at the particular significance level considered.

Null Hypothesis: The average number of complaints before Big Bang is equal to the average number of complaints received after Big Bang

Alternate Hypothesis: The average number of complaints before Big Bang is not equal to the average number of complaints after Big Bang

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State the hypothesis

Select the appropriate test statistic

Specify the level of

significance

State the decision rule

Collect the sample & Calculate

the sample statistics

Make a decision rule

regarding the

hypothesis

Make decision based on

the results of the test

1) Null Hypothesis: It is the hypothesis that has to be rejectedAlternate Hypothesis: It is the hypothesis which is concluded if the null hypothesis is rejected

H (0) (null hypothesis): - µ (0) = 4477VsH (a) (alternate hypothesis); - µ (a) ≠ 4477

u is the average no. of complains before Big Bang

2) Identifying the Test Statistics for the Hypothesis Test For the purpose of our hypothesis testing I have selected the T-test because-i) Sample size is very small for three years i.e. (2010, 2011 & 2012)ii) Data is normally distributed (Assumption)

Figure .3

Figure 3: The above formulae is used for calculating the t-test static value for t-distribution

Where the sample mean, s is the sample standard deviation of the sample and n is the sample size. The degrees of freedom used in this test are n − 1. Although the parent population does not need to be normally distributed, the distribution of the population of sample means is assumed to be normal.

For our hypothesis the sample mean is state is 7550.67 the average increase in the complaints before the big bang. µ0 = 4477, S is the same Std.deviation of increase in complaints before big band

Value of t-test static = 7550.67-4477 = 10.50 292.63

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3) We will be testing our data at three different significance levels i) 90%ii) 95%iii) 99%

Rejection points at three different significance levels (Value from t-tables for two tailed tests)Degrees of freedom = N-1 = 3-1 = 2

Figure.4

T-distributionSignificance Levels 90% 95% 99%

Rejection points 2.924.30

39.92

5

Figure.3 The above table summarizes the rejection points as different levels of significance. The values have been derived from the t- distribution tables

Figure .5

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We reject null hypothesis i) At 90% Significance level ii) At 95% Significance level T > 2.92 T > 4.303

iii) At 99% Significance level T > 9.925

4) Based on our above calculations and analysis The value of t-test static is greater than the value of rejection points T-test static value (10.5) > 2.92T-test static value (10.5) > 4.303T-test static value (10.5) > 9.925

5) Conclusion

Figure .6

Confidence IntervalsSignificance Level Lower limit Upper limit

90% 6696.19 8405.1595% 6291.48 8809.8599% 4646.31 10455.02

Figure 6 –The above table shows the confidence intervals at different significance levels

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Hence rejecting null hypothesis at all the three significance levels.

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Calculations: Confidence Interval at 90% Significance Level

Sample Statistic = 7550.67 (Average new complaints received each year before big bang)Critical Value = 1.886 (from t-distribution table two tailed test)Standard Error = 292.63 (Std.deviation /sqrt (3))

{[7550.67-(2.92) (292.63)] =6696.19{[7550.67+ (2.92) (292.63)] =8405.15

Similarly confidence intervals for other two significance levels have also been calculated.

Result:

1) We can say that with 99% probability that the true mean of the new complaints received after the big bang is not within the confidence interval of 4646.31 and 10455.02 because 4477 is not within the confidence interval. We reject null hypothesis µ0 = 4477.

2) We can say that with 95% probability that the true mean of the new complaints received after the big bang is not within the confidence interval of 6291.48 and 8809.85 because 4477 is not within the confidence interval. We reject null hypothesis µ0 = 4477.

3) We can say that with 90% probability that the true mean of the new complaints received after the big bang is not within the confidence interval of 6696.19 and 8809.85 because 4477 is not within the confidence interval. We reject null hypothesis µ0 = 4477.

Hence based on our current results we can say that the total number of complaints before “Big Bang” is statistically different from the total number of complaints received after “Big Bang” at all significance levels.

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Trend Analysis:

Figure.1

Figure.1: Number of new complaints received by FSOB (Ireland) each year from 2010-2011

Figure.2

2010 2011 2012 2013 2014100015002000250030003500400045005000

3737 36073961

3154

1893

Complaints Unresolved

Complaints

Years

No.

of C

ompl

aint

s

Figure.2: Number of complaints left unresolved year end

Complaints received for 2014 were 4,477, a decrease overall of 42% year on year. Substantial reductions in complaints are due to the efforts of FSPs to tackle the complaints beforehand and resolve the conflict before it reaches FSOB. Compared to previous years FSOB was able to channelize its man power in a more appropriate way. The number of complaints left unresolved at the end of 2014 saw a decrease of 40% year on year.

Figure.3

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2010 2011 2012 2013 20140

50010001500200025003000350040004500

Distribution of Complaints by Sector

InvestmentsBankingInsuranceMiscellaneous

Years

No.

of C

ompl

aint

s

Figure.3: Shows the distribution of complaints by sector each year from 2010 -2011. Miscellaneous category relates to complaints received which do not come within FSOB jurisdiction and these are referred onwards to the relevant body for action. They could include complaints regarding airlines, hired cars, garages/service stations, mobile phone companies etc.

Investment complaints have decreased by 65% from 770 in 2013 to 271 in 2014

Banking complaints decreased by 27% from 2,925 in 2013 to 2,127 in 2014

Insurance complaints decreased by 49% from 3,835 in 2013 to 1,955 in 2014

On a product basis, mortgage issues continue to be the highest driver of complaints, representing 28% of all complaints received. Payment protection policy complaints continue to be the main driver of Insurance complaints representing 15% of all complaints. However, payment protection policy complaints dropped significantly from 1,736 to 670, representing a drop of 61% of this type of complaint.

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Figure.5: The outcome of complaints settled by FSOB by Formal investigation is given above.

3,166 complaints were closed by way of formal investigation, finding or settlement.

2,238 complaints were closed by way of formal investigation and finding. 928 other complaints, representing 29% of all complaints closed, were

settled to the Complainant’s satisfaction utilising the resources of the office but without the requirement to follow through to a formal finding.

Figure.6

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Figure.5 Outcome (Settlement of Complaints by Formal Investigation)

10.1016.89

73.01

Year 2012

UpheldPartly UpheldNot Upheld

6.7715.82

77.41

Year 2013

UpheldPartly UpheldNot Upheld

6.5715.28

78.15

Year 2014

UpheldPartly UpheldNot Upheld

20112012

20132014

0.0010.0020.0030.0040.0050.0060.00

Complaints Resolved - Different Methods (%)

Formal Investi-gation & FindingSettlement & MediationComplaints Closed for other reasons

Year

Perc

enta

ge C

ompl

aint

s Res

olve

d

2011 2012 2013 20140.00

10.00

20.00

30.00

40.00

50.00

60.00

Complaints Resolved - Different Methods (%)

Formal Investigation & FindingSettlement & MediationComplaints Closed for other reasons

Year

Perc

enta

ge C

ompl

aint

s Res

olve

d

Figure.6: There are 3 methods by which FSOB settles complaints. The percentage breakdown for complaints resolved using all the three methods in respective years is given above

Figure.7

2011 2012 2013 2014800

900

1000

1100

1200

1300

1400

1044

1287

1120

936

Complaints Resolved by Settlement & Mediation

Complaints

Year

No.

of C

ompl

aint

s

Figure.7: Complaint trends for complaints resolved through mediation

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Figure.6: Complaints closed by other methods

26

Figure.6 Complaints closed by using other reasons.

Object 5

13.134.45

28.9946.55

6.87

2012

12.865.04

30.9145.74

5.45

2014

2011 2012 2013 20140

200000400000600000800000

1000000120000014000001600000

Compenstation Granted

InvestmentBankingInsurance

Year

No.

of C

ompl

aint

s

Figure.8

2011 2012 2013 20140

200000400000600000800000

1000000120000014000001600000

Compenstation Granted

InvestmentBankingInsurance

Year

No.

of C

ompl

aint

s

Figure.8: Total compensation granted by the FSPs to complainant (directed by FSOB in course of investigation)

The Act, under which the Financial Services Ombudsman was created, provides that the Ombudsman can direct a Financial Service Provider (FSP) to rectify the conduct complained of and in addition, award compensation of up to €250,000 where a complaint is upheld.

Summary of Trend Analysis:-

1) The number of complaints received by FSOB after Big Bang registered a decrease of 42%.

2) The efficiency in resolving complaints for FSOB increased by 40%.3) Percentage of Complaints closed due to other reasons decreased due to

increased involvement of Financial services providers in customer complaint handling process.

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Conclusion:

The FSOB received 4,477 complaints in 2014, compared to 7,722 complaints in 2013, a decrease of 42%. This continued a trend that started in the last quarter of 2013. Complaints were reduced across all three sectors. The biggest reductions occurred in Investment complaints, which were down 65% compared to the previous year; reductions also occurred in Insurance (decrease of 49%) and Banking (decrease of 27%). The reduction in the number of complaints has had an obvious effect on the workload of the office. The number of findings issued in 2014 was 2,238 compared to 2,983 in 2013, a decrease of 25%.

The total numbers of complaints after “Big Bang” are statistically different at all significance levels compared to the total number of complaints before Big Bang. However in the absence of limited data, based on only 2014’s data it would be premature to say that Big Bang is the only reason which lead to decrease in the overall complaints received by FSOB.As per the data records of Financial Service Ombudsman (Ireland) there has been an increase in the overall level of complaints when there is a economic downturn. The performance of markets has been better in the year 2014 as compared to the years before Big Bang. Therefore the exact impact of Big Bang is difficult to determine with the limited data on hand.

We can get more conclusive results after observing the complaint trends in the coming two to three years.

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Bibliography:

Nye, J.S. (1990) Bound to Lead: The Changing Nature of American Power, Basic Books, NY

Nye, J.S. (2004a) Soft Power: the means to success in world politics, p7-8, Public Affairs, NY

Nye, J.S. (2004b) The benefit of soft power, HBS Working Knowledge

Nye, J.S. (2004c) The decline of America’s soft power”, Foreign Affairs, May/June

Nye, J. S. (2005) The rise of China’s soft power, the Wall Street Journal Asia, 29 Dec.

Cristo, D. A. (2005) Book review, “Soft power: the means to success in world politics”, American Economist, 49:2, p99

Fan, Ying, (2008a) “Key perspectives in nation image: a conceptual framework for nation branding”, Working paper, Brunel University Research Archive (BURA), available at http://bura.brunel.ac.uk/items-bauthor?author=Fan%2C+Y&order=date

Davies, P, (1991) Status: What it is and how to achieve it, Piatkus, London

Fan, Ying, (2006) Nation branding: what is being branded? Journal of Vacation Marketing, 12:1, 5-14

Raven, B. and French, J. R. (1959) The bases of social power, in Studies in Social Power, edited by Cartwright, D. P. MI: Institute for Social Research, University of Michigan

Wang, J. (2006) “Chinese conception of soft power and its policy implications”, International Conference on “China in the International Order”, Spet. Nottingham University

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Schneider, Cynthia (2005). “Culture Communicates: US Diplomacy that Works,” in Jan Melissen, Ed., 2005.The New Public Diplomacy: Soft Power in International Relations, Palgrave Macmillan. (Pgs.147-168).

Chong, Alan. (2007) “Foreign Policy in Global Information Space. Actualizing Soft Power”. Palgrave McMillan

Brummer, C. (2010) “Why soft law dominates international finance and not trade”, Journal of International Economic Law, Vol.13 No.3 pp 623-643.

Lipson, C. (1991) “Why are some international agreements informal”. International Organization, Vol 45 no.4 pp.495-538.

Gersen, J.E. & Posner, E.A. (2008),”Soft law: lessons from conressional practices”, Stanford law review, Vol. 61 no.3 pp.573-627.

Financial Services Ombudsman Web Publications-Bi-annual and Annual Reports from (2010-2014) https://www.financialombudsman.ie/publications/https://www.financialombudsman.ie/case-studies/2015.asp

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Appendix –

Data

Number of New Complaints ReceivedYear Q-1 & Q-2 Q-3 & Q-4 Total2010 3631 3599 72302011 3780 3507 72872012 3682 4453 81352013 4676 3046 77222014 NA NA 4477

Active Complaints at the End of Each yearYear 2010 2011 2012 2013 2014Complaints 3737 3607 3961 3154 1893

Complaints Resolved by Different MethodsS.no Year 2011 2012 2013 2014

1) Formal Investigation & Finding 3040 2990 2983 22382) Settlement + Mediation 1044 1287 1120 9363) Complaints Closed for other of reasons 3380 3594 4542 2698

Total Complaints Closed 7464 7871 8645 58727464 7871 8639 5878

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Distribution of Complaints by Sector

Year Investments Banking InsuranceMiscellaneou

s Total201

0 1119 2379 3587 145 7230201

1 1024 2680 3443 140 7287201

2 840 3087 4064 144 8135201

3 770 2925 3835 192 7722201

4 271 2127 1955 124 4477

Complaints Resolved by Formal InvestigationYear Upheld Partly Upheld Not Upheld Total2011 361 467 2212 30402012 302 505 2183 29902013 202 472 2309 29832014 147 342 1749 2238

Complaints Resolved by Settlement + MediationYear Total2011 10442012 12872013 11202014 936

Complaints resolved for other reasons

Year Advisory Referral Appropriate for court of law Outside Jurisdiction Complaints closed Complaints Withdrawn Total201

1 447 125 721 1868 219 3380201

2 472 160 1042 1673 247 3594201

3 427 477 1317 2047 274 4542201

4 347 136 834 1234 147 2698

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