The Financial Services Compensation Scheme (FSCS) saw the number of claims received increase by 25% last year, as well as a 75% rise in enquiries.
The organisation said it received 39,500 new claims from consumer, largely as a result of high profile failures such as Keydata.
In its annual report and accounts for 2010/11, the FSCS said it paid out £535m in compensation for 2010/11, with £214m arising from the Keydata failure.
Meanwhile, payment protection insurance (PPI) claims accounted for just over 20% of new claims, with the FSCS saying it expects to receive a continuing high volume of PPI claims in 2011/12.
The FSCS also admitted its £4m public awareness campaign had not had the expected impact.
"We shall, therefore, be reviewing our approach in the early months of 2011/12. There is no doubt of the link between public awareness of the protection we provide and confidence in financial products," it said.
"The FSCS's research confirms that link. But, working with the industry, we need to look at new ways of engaging consumers to raise awareness."
The costs of running the FSCS in 2010/11 were just under £37m, up on the budgeted £32.7m because of the "higher than expected" number of claims.
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