In her keynote address at the 34th Annual Credit Law Conference, ASIC Commissioner Kate O’Rourke (pictured above) highlighted ASIC’s commitment to enhancing consumer outcomes and digital resilience.
O’Rourke detailed how ASIC’s regulatory priorities align with challenges in the banking and credit sectors, with a focus on financial hardship, scams prevention, and AI governance.
“Financial hardship, artificial intelligence, and combatting scams are all areas of intense and ongoing focus for ASIC,” O’Rourke said.
ASIC is taking a proactive approach to improving consumer outcomes, publishing multiple reports to address financial hardship, banking fees, and credit card lending.
In May, ASIC’s “Hardship, hard to get help” report (REP 783) found that lenders fell short in supporting customers facing financial stress.
“Lenders should ensure that customers are aware of financial hardship assistance and understand when and how to request it,” O’Rourke said.
ASIC will continue to collect hardship data through June 2025 and engage with lenders to monitor outcomes.
ASIC also addressed fee harm for Indigenous consumers, revealing that banks charged some low-income Australians as much as $3,000 annually in overdrawn fees. Twenty-eight million dollars in fees were returned, and 200,000 customers were moved to low-fee accounts, saving an estimated $10.7m per year.
ASIC is closely monitoring reforms in small amount credit contracts and consumer leases to ensure providers comply with responsible lending obligations.
As some providers shift away from traditional leasing models, ASIC is focusing on alternative credit products that could pose risks to consumers.
O’Rourke warned that ASIC will take enforcement action if lenders fail to comply with new regulations.
ASIC worked with the Australian Banking Association to develop a revised Banking Code of Practice, set to take effect in February 2025.
The updated code broadens the definition of financial difficulty, strengthens loan guarantor protections, and expands small business eligibility, supporting an additional 10,000 businesses.
In June, Parliament introduced draft legislation to regulate buy now, pay later (BNPL) under the National Credit Act.
ASIC is collaborating with Treasury to prepare for these changes, which will modify responsible lending obligations for BNPL providers.
Scam prevention remains a priority, with ASIC identifying $232m in scam transactions across 15 banks in 2023. Banks were able to stop just 19% of scam transactions and recover only 20% of stolen funds, with 96% of losses borne by customers.
To tackle this, the government is developing a Scams Prevention Framework in partnership with ASIC, the ACCC, and ACMA, imposing obligations on key sectors to better protect consumers.
ASIC is also monitoring the use of artificial intelligence (AI) in the financial sector, ensuring companies adopt responsible governance frameworks. Findings from a recent review of AI use will be published soon.
O’Rourke welcomed the upcoming regulatory initiatives grid, which will offer a 24-month forecast of major regulatory activities across agencies.
This initiative aims to minimise regulatory burdens by improving coordination and giving businesses greater visibility of upcoming reforms.
O’Rourke emphasised that “easing lending standards would not necessarily result in increased access to affordable credit.”
ASIC’s 2024 agenda focuses on enhancing consumer outcomes and advancing digital resilience, with ongoing efforts to reduce fees, combat scams, and enforce credit regulations.
With new legislation, industry partnerships, and regulatory reforms on the horizon, ASIC aims to strengthen consumer protections and foster a safer financial landscape throughout 2024 and beyond.
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