Our monitoring program
The Committee’s monitoring program aims to drive best practice in the banking industry. We do this by:
- looking at banks’ practices to identify problems
- recommending improvements, and
- reporting publicly on our findings.
Our comprehensive monitoring program incorporates regular self-reporting by banks, major and targeted inquiries, and investigation of potential breaches of the Code.
We encourage banks to have a positive culture of self-reporting, taking responsibility for identifying breaches, reporting them and making practice improvements to prevent future breaches. Every six months, banks must self-report breaches of the Code by completing a Banking Code Compliance Statement. We use this data to identify problems and advise banks on where they can improve, and publish the results in our Annual Reports.
In addition to relying on banks’ self-reporting, we also initiate inquiries into compliance issues of particular concern. Major inquiries – such as our recent inquiry into financial difficulty – generally examine all banks’ compliance with a broad obligation, often in an exploratory way. At the end of any major inquiry we publish a report sharing experience and identifying areas of good practice.
We also conduct smaller, targeted inquiries, examining a single bank, a subset of banks or a industry-wide but very specific issue. After completing a targeted inquiry, we may issue a finding, recommendation and/or publication.
The Committee has powers to investigate alleged breaches of the Code as well as potential breaches we identify through our monitoring activities, such as inquiries. Our investigations examine whether a bank has complied with its Code obligations and if it needs to change its policies or processes. Investigations give the Committee an opportunity to focus on concerns raised by individual customers, and to consider compliance issues within individual banks.
Prioritising the most important issues
To make the best use of our resources, we focus our monitoring on the most important issues – particularly ones that are industry-wide, serious or systemic. To do this, we rely on our Code Monitoring Priority Framework, which works like a risk model to help us identify the compliance issues that we should prioritise in our monitoring and investigations. We use data analytics – combined with a subjective assessment of data and qualitative information – to identify emerging problems and understand their significance.