Changes to the way the Banking Code of Compliance Committee operates will improve transparency by holding banks to account for the promises they make under the code, says the committee’s chair.
Ian Govey AM was responding to the Australian Banking Association’s announcement on October 21 that it accepts most of the recommendations from the final report of the independent review of the BCCC.
“These changes will, ultimately, deliver better outcomes for consumers,” BCCC chair Govey said. “They will improve transparency by holding banks to account for the promises they make under the code.”
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The review of the BCCC made a total of 19 recommendations – 10 of these were within the BCCC’s power to implement while the remaining nine required the acceptance of the ABA because they required a change to the Banking Code or the BCCC Charter.
The BCC review was conducted by former financial services regulator (ex-ASIC) Phil Khoury from consultancy firm cameron. ralph. khoury.
The BCCC is an independent committee that monitors and drives best practice compliance with the Banking Code of Practice. It examines banks’ practices, identifies industry-wide problems, recommends improvements to practice, sanctions banks for serious compliance failures, and keeps stakeholders and the public informed.
ABA CEO Anna Bligh (pictured above) said the ABA supported the majority of recommendations from the BCCC review, in particular the transition to greater transparency on bank compliance with the code through a naming regime.
“We think this is beneficial for lifting industry standards even higher,” Bligh said.
“While there is further work to do to address consistency in reporting and benchmarking to get ready for such a change, the ABA looks forward to working with the BCCC and other industry stakeholders on this objective.”
The ABA accepted eight out of the nine recommendations within its remit, including:
Regarding the one recommendation not supported – recommendation 17 that banks named by the BCCC for serious breaches also publish this fact on their own website – Bligh said “the BCCC has existing powers to publicly name banks that have breached the code without the need for banks to repeat this information on their own websites”.
Bligh said compliance monitoring work undertaken by the BCCC was crucial to build public trust and confidence and keep banks accountable.
“The work the BCCC does on identifying areas for improvement is very valuable to banks in identifying areas for further work and ultimately delivering better customer outcomes,” she said.
In responding to the review, the ABA sought the views of member banks and considered recent reports relating to BCCC priorities.
Govey said it was disappointing that the ABA had not supported recommendation 17 but noted that the committee was pleased the ABA had accepted in principle a separate recommendation that banks be named in the BCCC’s regular reporting on breaches.
“We look forward to working with the ABA to map out the plan for this new milestone in reporting,” he said.
Govey said the accepted recommendations would also result in greater sharing of information with ASIC and AFCA.
“This will allow greater co-ordination between organisations and ensure consumers receive the appropriate response to issues. It also avoids duplication for banks,” he said.
The 10 recommendations that the BCCC is implementing itself include steps to clarify roles and priorities, improvements to monitoring and reporting and more targeted and timely inquiries.
Govey said the BCCC had already undertaken considerable work to revitalise its Small Business and Agribusiness Advisory Panel.
It welcomed the ABA’s decision to give the panel time to establish itself rather than appoint a fourth member to the committee at this time.
“With the ABA and banks, we are already working on projects to improve the consistency of compliance reporting and benchmarking,” Mr Govey said.
The independent review of the BCCC began in August 2021 and the report was published in December 2021. This regular review was held in parallel with the separate independent review of the Banking Code of Practice.
