Customer-Owned Banks Urged to Improve Reporting

Media release originally from Customer Owned Banking Code Compliance Committee 27/04/2023

The Customer Owned Banking Code Compliance Committee (COBCCC) has warned customer owned banking institutions to improve reporting following the release of its 2021-22 Annual Data Report.

The report reveals that too many subscribers reported either no breaches or a low number of breaches of the Customer Owned Banking Code of Practice (the Code), establishing a concerning trend of three consecutive reporting periods.

The COBCCC considers zero breaches to be highly unlikely and questions the adequacy and effectiveness of the monitoring and reporting systems and capabilities of customer owned banking institutions that continually report no breaches.

Chair of the COBCCC, Jocelyn Furlan, spoke about the finding upon publication of the Annual Data Report.

“Reporting no breaches or complaints is not normal and is certainly not an easy way to present a clean record and good reputation,” Ms Furlan said.

“We consider this as an indication that an institution’s monitoring and reporting systems and capabilities are not up to scratch.

“Seeing so many Code subscribers under report again this year – especially the ones that reported zero breaches or complaints – is disappointing considering our efforts to encourage better reporting.”

In the report, the COBCCC reiterated its view that proper reporting of all breaches and complaints is integral to improvements and better outcomes for customers.

“You cannot improve services if you are not properly monitoring, identifying and reporting breaches and complaints; they are simply an integral part of improving services and outcomes,” Ms Furlan said.

“If a customer owned banking institution has the desire to deliver better outcomes for customers, it will take its breach and complaints reporting seriously. It will report fully and then make the effort to learn from them.

“Doing so will also help bring about a culture of compliance in the institution – something we, as a Committee, have encouraged for some time now.”

The Annual Data Report also noted that many subscribers were failing to record breaches against appropriate Code provisions.

It urges subscribers to consider breaches carefully and categorise them according to specific Code provisions rather than using the broad ‘Key Promises’ section of the Code.

Ms Furlan emphasised the importance of this: “By thoroughly understanding breaches and recording them accurately, customer owned banking institutions can improve risk and compliance frameworks and create a positive and proactive compliance culture.

“It also demonstrates a commitment to the Code and a desire to take reporting obligations seriously,” Ms Furlan said.

The COBCCC’s Annual Data Report also noted that there had been a significant increase in the number of breaches reported relating to responsible lending. The COBCCC will closely monitor this area in future reporting periods to ensure that subscribers are meeting their obligations under the Code.

With valuable insights into compliance with the Code, the Annual Data Report is an important resource for customer owned banking institutions. The COBCCC encourages all institutions to take note of the report’s findings and implement improvements.