The FOS Code Compliance and Monitoring Team supports four independent Committees to monitor compliance with codes of practice in the Australian financial services sector, to achieve service standards that people can trust.
The 2013-14 Annual Reports of three of these Committees in the banking, customer owned banking and insurance broking industries were published last month. They reveal that 2013-14 was a period of transition when new or revised codes of practice and governance frameworks came into effect in each sector, strengthening service standards and key promises and reinforcing consumer protection in a range of areas.
In the Australian banking industry, the Code Compliance Monitoring Committee’s 2013–14 Annual Report details the Committee’s work to monitor compliance with the Code of Banking Practice and reflects on the Committee’s ten years of operation. The Committee reported that the 18 banks that subscribe to the Code had engaged proactively throughout transition to the revised Code which came into effect on 1 February 2014.
Some key code compliance statistics for the reporting year include:
- 5,762 breaches of the code were self-reported by the banks, down 23.7% from 2012–13; banks attributed this result to improved processes and procedures.
- The primary areas of non-compliance concerned Privacy (1745 breaches) and Key Commitment obligations such as acting reasonably and fairly towards customers (2247).
- 1.1 million consumer disputes were dealt with by the banks, which resolved 91% of these disputes within five days, and
- 288,139 requests for financial difficulty assistance were received by the banks, up 32.5%. A total of 63% of these requests were granted assistance.
In 2014–15, the Committee will continue to help the banks in their efforts to achieve consistent and effective internal compliance monitoring processes and procedures.
For more information, please read the Code Compliance Monitoring Committee 2013–14 Annual Report.
Customer owned banking
In the customer owned banking sector, which includes mutual banks, credit unions and mutual building societies, the Code Compliance Committee worked with 89 Code Subscribers throughout 2013–14 to maintain standards of practice and service while transitioning to a revised Code, which came into effect on 1 January 2014.
Code Subscribers generally performed well according to the Committee’s 2013–14 Annual Report, which outlined that:
- 800 code breaches were self-reported by Code Subscribers, down 13% from 2012–13.
- Code breaches related primarily to Privacy (105 breaches), Chargebacks (172 breaches) and Code training obligations (132 breaches).
- There was a 14% decrease in customer complaints handled by Code Subscribers’ internal dispute resolution processes.
- 56% of these complaints were resolved within five days, and
- 83% of these complaints were resolved in favour of the customer or by mutual agreement.
For more information, please read the Customer Owned Banking Code Compliance Committee 2013–14 Annual Report.
Last year, NIBA (and its members) made significant changes to its self-regulatory framework, introducing a new code of practice to be monitored by an independent Code Compliance Committee. Not surprisingly, effective code transition was a primary objective for the inaugural Committee, which worked with 361 Code Subscribers to align their systems and procedures with the code’s revised obligations.
According to the Committee’s 2013-14 Annual Report:
- 85% of Code Subscribers self-reported successful transition to their new obligations under the revised code.
- Thirty Code Subscribers took part in a Verification program to review their code compliance systems, address any code compliance issues and share examples of good practice.
- While some Code Subscribers effectively trained their staff and representatives in the revised code’s obligations, an inquiry of 135 code subscribers demonstrated that there remains room for improvement.
For more information, please read the Insurance Brokers Code Compliance Committee 2013–14 Annual Report.