The independent Banking Code Compliance Monitoring Committee (CCMC) has today released a report examining, in detail, banks’ reporting of Code breaches in compliance with the Code of Banking Practice.
Overall, the Committee was encouraged by the banks’ responses to its inquiry into breaches that occurred during 2016–17. It did, however, identify several areas for improvement.
When reporting to the CCMC, banks identified human error rather than systems failure or fraud as the main cause of non-compliance. It was responsible for 98% of breaches.
In response, the CCMC suggested that banks should examine ways to develop systems and system controls that prevent repeated errors.
The inquiry also found that for around one-quarter (26%) of breaches, banks did not report any associated corrective action.
“When banks do the wrong thing, we expect them to correct their mistakes” the Independent Chair, Prof Christopher Doogan AM, said. “Our inquiry found that, of the almost 10,000 breaches examined, banks reported that at least 150,000 customers were impacted. We believe this would be significantly higher if banks comprehensively reviewed the impact of all their Code breaches.”
The most commonly breached Code obligation was provision of credit, accounting for 42% of all breaches. Other major breach categories were privacy and confidentiality (28%) and debt collection (21%).
This inquiry is part of the CCMC’s ongoing strategy to improve compliance by banks.
- The Committee aims to ensure that subscribing banks honour their obligations to their customers under the industry Code. It monitors banks’ practices, identifies and reports on industry-wide problems and encourages continuous improvement in the sector. It is comprised of consumer and banking representatives with an independent Chair.
Information about the Banking Code Compliance Monitoring Committee is available on its website, www.ccmc.org.au.
Chief Executive Officer (Acting)
Banking Code Compliance Monitoring Committee
(03) 9099 2295