The Banking Code Compliance Monitoring Committee’s Annual Report, released today, outlines how the industry met the obligations of the Code of Banking Practice in 2016–17.
Banks self-reported 10,402 Code breaches in 2016–17, which was 30% more than last year, although the Committee acknowledged inconsistencies of collecting data and reporting breaches across the banks.
For the third consecutive year, the key risk area was provision of credit. The Committee described the 4,200 self-reported breaches of provision of credit obligations as a distinct concern.
“Of all the obligations in the Code, those reflecting the provision of credit are among the most important,” Committee Chair Christopher Doogan said. “Where banks fail to meet these standards, the impact for consumers can be far-reaching.”
The Committee’s inquiry into provision of credit, released in January 2017, identifies areas where banks can improve lending, particularly in relation to the introduction of ‘serviceability buffers’ and the assessment of credit card top ups.
The Annual Report also shows that banks are still not meeting their obligations to cancel direct debits at a customer’s request. ‘Mystery shopping’ research found that more than half (54%) of bank staff gave customers incorrect responses to questions about cancellation of direct debits.
Banks received 303,635 requests from customers seeking financial difficulty assistance (9% more than last year). Banks granted assistance in three-quarters (73%) of these cases but approval rates varied substantially between banks.
The Committee welcomes banks’ flexible approach in assessing financial difficulty and their reduced reliance on supporting documentation.
“This flexibility is especially important for vulnerable customers and those facing family or financial abuse, who may not be able to provide documentation,” the Committee said.
The Annual Report praised initiatives especially by the big four banks to improve Indigenous financial inclusion and literacy. The Committee commissioned a special report showcasing these initiatives, many of which exceeded the Code’s requirements.
Customers made 1.2 million complaints to banks (1% more than last year). Of these complaints, 92% were resolved within five days.
The Banking Code of Practice and the Banking Code Compliance Monitoring Committee itself were independently reviewed in 2016–17. These reviews gave the Committee an opportunity to acknowledge that much has been achieved and consider how its work can drive further improvement in banking practice. A revised Code and Committee Mandate are expected to be released later in 2017–18.
- The Banking Code Compliance Monitoring Committee’s role is to assure the community that subscribing banks honour their obligations to their customers under the Code. The Committee monitors banks’ practices, identifies and reports on industry-wide problems and encourages continuous improvement in the sector.
Information about the Banking Code Compliance Monitoring Committee is available on its website, www.ccmc.org.au/
Chief Executive Officer
Banking Code Compliance Monitoring Committee
(03) 9613 7341