Message from the Chair

The year has been one of both reflection and important action for the Banking Code Compliance Committee (BCCC). We were subject to our first Independent Review since the BCCC’s establishment in July 2019, and focused on implementing our response to the review recommendations while also delivering on our trusted compliance monitoring program.

The review was conducted by Mr Phil Khoury of cameron. ralph. khoury and examined the operations and performance of the BCCC. It coincided with the periodic review of the Banking Code of Practice (the Code).

I am pleased the review highlighted the critical role the BCCC plays in promoting compliance among banks and ensuring banks are being held to high standards by the Code. I thank Mr Khoury and his team for their consultative approach to the review and the comprehensive report.

The review provided us with an exciting opportunity to consider and develop our operations, allowing us to renew our focus on exceptional service, effective engagement and meaningful data analysis for both the industry and the community.

We have made significant progress on implementing changes, in particular revitalising our Small Business and Agribusiness Advisory Panel, including the appointment of new members who provide support to us with expert insight and advice.

We are progressing information sharing and data collection improvements. We know this is critical to improve what we do. We provided relief to subscribers by suspending specific reporting requirements while we progress this work. We are working with the Australian Securities and Investment Commission (ASIC), the Australian Financial Complaints Authority (AFCA) and the Australian Banking Association (ABA) to consider ways to share information more effectively and to streamline data collection. This will ensure we have the right information to effectively monitor compliance and identify emerging risks, while reducing the reporting burden for banks where possible.

Alongside the independent review and associated workstreams, we kept a focus on our regular program of work throughout the year. We finalised our inquiry on inclusivity, accessibility and vulnerability, sharing a range of examples of good and poor practice and making recommendations to improve customer outcomes. Ensuring that customers, especially customers experiencing vulnerability, are treated with extra care remains a key priority for us. This is particularly pertinent in the post-pandemic environment.

We will follow up with banks to ensure progress to address the inquiry’s recommendations.

We would like to highlight improvements we observed in subscribers’ compliance with direct debit obligations in the Code. Cancelling direct debits on request is a key issue for consumers who want to retain control over their finances. We released an update in September 2021 where our research found a shift from less than half of the sample tested being compliant with direct debit obligations to nearly three quarters of the sample tested being compliant and managing direct debit cancellations well. This demonstrates meaningful improvement but there is still further work to do.

It is with mixed feelings that we reflect on the rise in Code breaches reported across the industry in 2021–22. Our most recent report on compliance with the Code showed banks reported almost 25,000 breaches between July and December 2021, up from around 21,000 in the six months before that. On the one hand we acknowledge the work banks have done to improve their processes to comply with enhanced reporting obligations. On the other hand, we want to see breaches coming down. Banks have had sufficient time to consider the new regulatory environment and implement better systems and processes to comply with obligations. In the next year, we expect to see banks report fewer breaches.

Finally, I would like to acknowledge the BCCC secretariat as they, like so many others, have continued to deliver great support to the Committee while working remotely. And thank you to my Committee colleagues, Industry Representative Anne O’Donnell and Consumer Representative Cat Newton, for their invaluable insights and contribution to the Committee’s work during the year.

Ian Govey AM