The speed of change and advent of new media create more opportunities to provide information but there are also traps for consumers and a regulatory challenge, the Financial Ombudsman Service conference heard last week.

Futurist Tim Longhurst told delegates how new payment systems can circumvent banks and anyone can share their opinions and expertise on websites such as YouTube.

He says staff dealing with customers often see change but feel they have no power to act, while those at the top of the organisation feel out of touch and overwhelmed.

The biggest challenge for advisers is not that they give away too much online, but rather that consumers do not know about the value of their advice.

However, a panel discussion at the conference questioned how well new websites and payment systems will work when something goes wrong, and how they will be regulated.

Insurance Council of Australia GM Consumer Relations and Market Development Vicki Mullen questioned how consumers can use new media to obtain information they need.

“How can all this assist consumers to get a product that is fit for purpose?” she said.

She says the basis of insurance is the promise to pay, and if a claim is not paid then trust is breached.

New forms of delivery should comply with regulatory frameworks, she says, citing peer-to-peer insurers such as Friendsurance of Germany.

Under that model, consumers buy insurance online then use their social networks to invite connections to pay up to €30 ($43) of a claim. The insurance provider pays the part of the claim above the network support and rewards the policyholder with a payback.

“What happens when things go wrong and the well-considered consumer protections just aren’t there?” Ms Mullen said.

“It is a big challenge for industry and a big challenge for governments.”