_{Note: An updated report was uploaded on 15 December 2023.}

Chair’s message

It is important to start with a notable achievement — an overall 9% decrease in breaches, including decreases for three of the major banks, during this reporting period.

It signifies a concerted effort by the banking sector to improve practices and uphold the standards in the Code.

However, our optimism is tempered by a concerning increase in breaches of Part 9 of the Code, which contains the crucial obligations to support customers facing financial difficulty. The almost 40% increase of these breaches is alarming.

In a time marked by escalating inflation and living costs, the imperative for banks to provide support to customers in financial difficulty cannot be overstated. Breaches of these obligations can lead to serious consumer detriment.

Banks reported failing to respond to financial hardship requests, persisting with debt collection activities despite hardship arrangements being in place, and neglecting to follow through on agreed-upon hardship arrangements. Such failings not only breach Code obligations, but they also contribute to a decline in trust and confidence in the industry.

Banks have had ample time to anticipate the surge in financial hardship requests and implement measures to manage them effectively. As we move into the next reporting period, we expect the industry to prioritise improvements in staff training, systems and procedures to better support people in need during these challenging times.

Our report highlights another emerging concern—a suspected underreporting of breaches.

Underreporting of breaches signals risks with inadequate processes and systems or lack of commitment to Code obligations. Ultimately, this undermines banks’ ability to identify and correct issues and improve customer outcomes, which in turn jeopardises the efficacy and benefits of the self-regulatory Code.

We will continue to monitor the progress and outcomes of the industry’s response to these challenges. We know that banks have a range of ways to support customers experiencing financial difficulty. They need to do more to provide that support fairly and consistently.

We look forward to working with banks to strengthen compliance with the Code through better reporting and safeguard the trust that is at the core of the industry’s relationship with customers.

Ian Govey AM
Independent Chairperson
Banking Code Compliance Committee