Accomplish 32 – December 2017

The Customer Owned Banking Code Compliance Committee (the Committee) promotes compliance with the Customer Owned Banking Code of Practice (the Code) to encourage best practice by Australian customer owned banking institutions to benefit their customers and communities.’

In this issue:

Annual Compliance Report 2016-17

News from the Committee

Own motion inquiry ‘Privacy’

Feedback wanted

Check out our website – www.cobccc.org.au

Diary dates

Annual Compliance Report 2016-17
Growing culture of positive breach reporting among customer owned banking institutions

The Customer Owned Banking Code Compliance Committee’s Annual Compliance Report was published on 1 December 2017 and provides an in-depth look at its work in monitoring compliance with the Customer Owned Banking Code of Practice for the 2016–17 financial year.

A copy can be downloaded here.

The report finds that:

  • Self-reported Code breaches increased by 50%, indicative of a growing culture of positive breach reporting among customer owned banking institutions.
  • But reporting is inconsistent: one quarter of institutions self-reported no breaches and 12% reported no complaints.
  • Customer owned banking institutions need to review their sources for compliance processes and reporting to ensure that they are a true reflection of performance.
  • 24% of self-reported breaches were for non-compliance with privacy obligations, commonly involving the advertent disclosure of personal information to third parties, with human and processing errors typically identified as the primary cause.
  • 12% of self-reported breaches were for non-compliance with responsible lending practice, representing an increase of nine per cent in this area. This included one institution with over $1b in assets self-reporting 86 breaches.
  • 11% of self-reported breaches were for non-compliance with legal and industry obligations.
  • 11% of self-reported breaches were for non-compliance with the customers’ rights as owners’ obligation, to ensure that customers receive balanced and adequate information about the benefits, costs and impacts of any proposal to change the institution’s ownership structure, such as mergers and takeovers.
  • 24% of self-reported complaints were about customer service issues, including general feedback and improvement suggestions.
  • From the four matters received for investigation, the Committee identified one Code breach.

Committee Chairman, Sue-Anne Wallace AM, said that the Committee hoped the Report findings would ‘be a valuable source of insight and learning for customer owned banking institutions, prompting renewed efforts to improve customer service’.

News from the Committee

The Committee is currently preparing for its strategic discussion meeting in March next year and developing new ideas and proposals for monitoring and compliance work for the 2018-19 period.

This will include:

  • development of the 2018 Annual Compliance Statement (ACS) to be issued in June 2018 for completion by 31 August 2018
  • ACS verification program to be conducted with a selection of institutions via telephone conferences during September/October 2018
  • development of an own motion inquiry to be issued in October/November 2018 for completion by mid December 2018
  • planning for the Royal Commission inquiry into the financial services industry, in particular regarding the review of the adequacy of ‘forms of industry self-regulation, including industry codes of conduct.’
  • providing feedback to the Customer Owned Banking Association (COBA) regarding the upcoming review of the Code.

In October, Sally Davis, General Manager of the Code team attended the Annual Credit Law Conference and presented on unfair contract terms. The Code team also attended and presented at the Financial Consumer Rights Council (FCRC) Conference in Lorne (Victoria). The presentation related to the use of codes of practice as an advocacy tool, as part of financial counsellors’ professional development program. Code team staff also participated in the FCRC speed dating session to increase awareness of industry codes, including the Customer Owned Banking Code of Practice.

Own motion inquiry ‘Privacy’

If you need any assistance in order to complete the Committee’s current own motion inquiry regarding privacy obligations, please contact us on info@codecompliance.org.au.

Information and your individual link and password to access the online portal to lodge your response was provided on 25 September and 27 October 2017.

The deadline for completion of the online questionnaire has been extended to 13 December 2017.

The main purpose of this inquiry is to gather information to determine the cause of the high number of breaches regarding privacy obligations and highlight areas for improvement in current industry practice and performance. It is also intended to provide an insight into the compliance activities that institutions undertake to rectify breach issues including the updating of staff training and implementation of long-term strategies to embed compliance with privacy obligations in the institution’s risk framework.

Feedback wanted

Do you want to become part of the Industry Liaison Group?

If you are interested in providing ad hoc feedback on compliance monitoring activities and would like to be involved in the development of compliance questionnaires, such as the Annual Compliance Statement and Own Motion Inquiries, please contact Daniela Kirchlinde on dkirchlinde@codecompliance.org.au

The commitment will not be difficult or time consuming. We will ask for your comments on draft documents, such as the development of questionnaires for own motion inquiries.

Check out our website – www.cobccc.org.au

Check out the specific information for consumers and Code Subscribers on our website, in particular how to comply with the Code regarding financial difficulty obligations, advertising standards and direct debit arrangements.

Consider providing the fact sheets in the news and publications section to your staff for training purposes.

Consumer information includes explanations of customer rights under the Code, including the rights of customers in financial difficulty, as well as information for small business and instructions on how to report a concern. Meg’s story provides a good case study.

Diary dates

Committee meetings

  • 12 March 2018 – Committee meeting in Sydney
  • 20 June 2018 – Committee meeting in Melbourne
  • 19 September 2018 – Committee meeting in Melbourne
  • 21 November 2018 – Committee meeting in Melbourne

Conference attendance

  • 19-20 Mar 2018 – ASIC Annual Forum ‘Maintaining Trust’, Sydney
 

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