The banking code compliance committee (BCCC) has released a report providing Code-subscribing banks’ senior leaders with guidance on how to build organisational capability to improve compliance with the Banking Code of Practice (the Code).
The report provides Code-subscribing banks’ (banks) senior leaders with guidance on how to build organisational capability to improve compliance with the Banking Code of Practice (the Code).
The BCCC recommendations in this report are focused on the steps banks should take to make compliance with the Code a core part of its strategy and culture. Banks can achieve better and more consistent outcomes for customers by developing an integrated approach to Code compliance.
The BCCC is concerned that too often banks identify ‘human error’ as the cause of Code breaches without establishing, recording or acting on the ‘root cause’ of the problem. When a breach occurs for which ‘human error’ is to blame, it is often the case that staff conduct or actions have been influenced or constrained by internal systems, processes, technology, training and/or organisational culture.
The BCCC commissioned Deloitte’s Human Capital team to research how banks can best equip, support and enable staff to comply with the Code, and build organisational capability within a banking context.
Deloitte conducted extensive research, including engagement with banks through an industry-wide survey, a series of focus groups and interviews to gather perspectives from employees at various levels within banks. The BCCC appreciates the candid feedback banks provided to support this research.
The research identified industry challenges, opportunities for improvement and good practice with respect to compliance capabilities. This enabled Deloitte to provide the BCCC with findings about which key factors influence organisational capability for Code compliance.
This BCCC report is informed by Deloitte’s research findings and contains five key capability areas and recommendations for improved industry practice.
The BCCC considers this to be a ‘live document’ and expects banks to demonstrate how they have considered the report’s recommendations to improve Code compliance capabilities and customer outcomes when responding to future BCCC monitoring activities.
Key capability areas and recommendations for better practice:
- Communication strategy
- Learning and development
- Systems, processes and technology
- Enhancing capability through robust compliance frameworks
For each key area the report contains insights from industry participants to Deloitte’s research on what banks are currently doing well and where they face challenges, along with better practice recommendations.
The recommendations should be viewed holistically – an impactful communication strategy, effective learning and development, and designing all systems, processes and technology with the needs of customers and employees at their centre – are all inevitably underpinned by an organisation’s culture and a mind-set of continuous improvement and delivering good customer outcomes.
View the Report here.