Original media release (20/06/2023) from the Customer Owned Banking Compliance Committee.
A report from the Customer Owned Banking Code Compliance Committee (COBCCC) has highlighted the importance of Code subscribers seeking clarity about the new Code’s requirements, mitigating human error through training and continuously evaluating compliance frameworks.
The report, 2022 Code Transition and Implementation, presents the findings of an inquiry into how customer owned banking institutions have approached transition to and implementation of the new industry Code of Practice.
While all customer owned banking institutions that subscribe to the Code reported various preparation activities as part of their Code transition projects, subscriber assessments of the work involved suggest a need for better planning, scoping and costing, particularly by smaller institutions.
Chair of the COBCCC Jocelyn Furlan acknowledged that smaller subscribers have fewer staff and resources than their larger counterparts.
“However, signing up to the new Code is a commitment to providing better outcomes for customers, and the Committee expects all subscribers, regardless of their size, to have prepared for its implementation,” Ms Furlan said.
The report revealed a number of subscribers are uncertain about how to interpret some of the new Code’s obligations, including those relating to inclusive banking, vulnerability and lending.
“It is really important that all subscribers understand the Code’s requirements,” Ms Furlan said.
“If a subscriber is confused about the meaning of an obligation or uncertain as to what constitutes ‘best practice’, we encourage them to reach out and seek clarity. This will help prevent Code breaches and poor customer outcomes.”
The report emphasised the importance that customer owned banking institutions had placed on training in preparation for the new Code.
Ms Furlan said the Committee recognised the efforts in training, particularly as human error was self-reported by subscribers to be one of the main causes of breaches in recent years. This included process and procedures not followed and manual error.
“Staff awareness of Code obligations, as well as adequate systems and processes, are critical in Code compliance,” Ms Furlan said.
“With human error being reported as a factor in so many Code breaches, we were pleased to see many of the subscribers indicating that they are putting effort into training programs in preparation for the new Code.”
However, the report noted that more work was needed following Code transition to ensure compliance with new obligations. It emphasised the need for post implementation reviews (PIRs).
“PIRs offer valuable insights for improvement,” said Ms Furlan.
“Encouragingly, 82% of the subscribers reported conducting or planning to conduct a PIR within 12 months. These reviews help evaluate the transition process and ensure compliance arrangements meet expectations.
“Ideally, we would like to see all of the subscribers conduct a review.”
The COBCCC urged subscribers to ensure they have aligned compliance frameworks with the new Code and have prioritised good customer outcomes.
Collaboration and transparency among stakeholders are crucial in maintaining trust and achieving continuous improvement.
Read the Report on the COBCCC website.