The Code Compliance and Monitoring Team (Code Group) assists five independent committees to monitor compliance with various Codes of Practice and strives for best practice across the Australian financial services sector.

The Codes of Practice set industry standards for service provision, professional conduct and ethical behaviour. The AFCA Code Group monitors compliance with these standards and supports the five independent committees, providing them with operational and support services. Each committee has an independent Chair, a consumer representative and an industry representative.

The Code committees seek to raise industry standards and improve consumer outcomes by helping subscriber firms comply with the Code. 

This function is separately operated from AFCA and the business unit is funded by industry associations and code subscribers. 

While each Code committee reports separately to their stakeholders on work completed, AFCA takes this opportunity to summarise the key contribution made to the sector by the Code Group and the committees in the last financial year.

Education and guidance

The Code Group’s focus on strong education and guidance assists the committees to clarify Code obligations for subscribers and ensure sustained compliance benefits for consumers.

Resources developed for Code subscribers address specific risks, concerns and recommend improvements in practice. These include:

• reports on specific compliance issues 
• inquiry findings and reports 
• case studies showing good and bad practices and their outcomes, and the impact on consumers and small business
• guidance on the operations of the Codes
• highlighting trends and patterns in Code compliance 
• determination notes
• articles.

The Code Group and committees produced a range of resources during 2022–23 including the following:

BCCC:

• Two Code compliance reports – July to December 2021 (published September 2022) and January to June 2022 (published February 2023)
• Industry Data Report – Compliance activities of banks in 2020–21 (published November 2022)
• Guidance Note 1: Breach Identification and Reporting – Bank Code non-compliance report (published September 2022)

These resources focus on improving processes and practices for consumers, and helping banks understand a crucial part of the Code.

COBCCC:

• Annual Industry Data Report 2021–22, an overview of subscriber breach and complaints data (published April 2023)
• Individual Benchmark Reports – tailored subscriber reports to measure industry compliance (published November 2022)
• Report of inquiry into how subscribers transitioned to the 2022 Code (published June 2023)
• Five articles providing subscriber guidance related to compliance with the Code
• Two webinars to help subscribers understand and complete their Annual Compliance Statement and the importance of a self-regulatory framework

These resources highlighted compliance issues and areas for sector improvement. They also helped prepare subscribers for the launch of the 2022 Code, including new obligations for lending, small business and supporting vulnerable customers.

GICCC:

• Committee process guidance on reporting significant breaches and serious misconduct to ASIC (published October 2022)
• Guidance on timeframes for handling claims (published July 2022)
• Annual industry data report outlining industry Code compliance (published April 2023)

These resources helped subscribers with Code compliance and improving their compliance processes and practices.

Life CCC:

• Twenty-four determinations reporting on the outcomes of investigations
• Guidance Notes – claims decision timeframes (published September 2022)
• Case study with guidance on planning for system migrations (published October 2022)
• Individual Benchmark Reports – tailored subscriber reports to measure their industry compliance (published December 2022)
• Annual Industry Data and Compliance Report 2021–22, an overview of industry compliance (published March 2023)
• Guidance for subscribers transitioning to the new Code (June 2023)

These resources cover a range of revised Code compliance issues – improving practices and strengthening processes.

IBCCC:

• Annual Industry Data Report 2022 – an overview of subscriber breach and complaints data (published April 2023)
• Individual benchmark reports – two sets of tailored subscriber reports to measure their industry compliance (published November 2022 and June 2023)
• Report of inquiry into how subscribers encouraged good behaviours and a culture of compliance (published November 2022)
• Five subscriber guidance articles on a range of matters relevant to Code compliance
• Two webinars to help subscribers understand and complete their Annual Compliance Statement

These resources focused on helping subscribers transition to the 2022 Code, and ensure they fully understood their new obligations and were well placed to meet them.

Inquiries

An inquiry is a formal examination of a particular issue and identifies:

• the size of an issue 
• root causes 
• consumer impacts. 

Inquiries take on different focuses and forms when addressing the Codes. They aim to: 

• identify what works well 
• help subscribers understand their obligations 
• highlight areas for improvement.

Initiated inquiries have identified areas of concern and recommended how subscribers can improve processes and practices. They have provided valuable lessons and guidance.

In 2022–23, the Code Group and the Committees undertook several inquiries:

BCCC

• An inquiry into compliance with obligations for estates of deceased customers (published June 2023)
• A follow-up inquiry examining bank progress following the 2021 inquiry into compliance with obligations for guaranteed loans (final report will be published in early 2023–24)
• A follow-up inquiry to examine bank progress following the 2021 inquiry into compliance with obligations for inclusivity, accessibility and vulnerability (final report will be published in early 2023–24)

COBCCC

• Inquiry into the practices of subscribers that report zero breaches or complaints (final report will be published in 2023–24)

GICCC

• Inquiry into how financial hardship information on insurers’ websites complies with the Code’s spirit and intent (published June 2023)
• Inquiry into the processes for making claims decisions (published July 2023)

Life CCC

• Inquiry into compliance with design and introduction of new life insurance policies (published March 2023)
• Inquiry into compliance with sending annual notices (final report will be published in 2023–24)

IBCCC

• Inquiry into the practices of subscribers that report zero breaches or complaints (final report will be published in 2023–24)
• Inquiry into subscribers preparation and implementation of the 2022 Code (final report will be published in 2023–24)
• Inquiry into subscribers assistance of vulnerable clients (final report will be published in 2023–24)

Investigations

The Code Group‘s core work with the committees is monitoring and investigating Code compliance.

Investigations can take several approaches including:

• examining multiple factors
• the nature of the allegation or breach
• industry specifics of the Code obligations. 

There is a wide range of outcomes for investigations across the Codes.

An investigation aims for both consistency and impartiality. The committees examine either a potential or an actual breach, recommend improved practices and issue sanctions for serious failures. They report publicly on their findings if it’s appropriate.

In 2022–23, the Code Group undertook key investigations on a range of compliance matters. Specifically:

• the BCCC finalised 79 allegations and commenced four new investigations
• the GICCC opened 191 investigations into possible and alleged breaches. After processing, 24 went to investigation, and 42 of the 123 significant breach matters also went to investigation
• the Life CCC worked on 236 investigations, including significant Code breaches.

Stakeholder engagement 

The Code Group couldn’t fulfil its purposes and goals without cooperation and collaboration from the industry, consumer groups, government agencies and regulators.

Several key stakeholders share their knowledge, expertise, experience and support with the Code Group. It works closely with the committees, industry associations and consumer groups on various matters relevant to each Code and to consult on its priorities. The Code Group also assists the committees to make submissions to external inquiries, including government and relevant industry codes and issues.

The BCCC held its first forum in October 2022. Themed ‘Keeping Customers at the Core’, the forum was held in Sydney and streamed online to a large audience. The forum provided a valuable platform for industry stakeholders to discuss a range of important issues in banking today through panel discussions, panel sessions and interactive presentations.

By monitoring compliance with the Codes, the Code Group and the committees play an important role in the broader consumer protection environment. They have worked closely with AFCA, ASIC and consumer groups on complaints and regulation issues, seeking to avoid duplication and deliver consumers the best outcomes.

The General Manager of Code Compliance, Prue Monument, is a member of the AFCA Consumer Advisory Panel and this exposure enables the Code Group to collaborate and cooperate with a wide range of stakeholders. It benefits greatly from this experience and the shared knowledge that it facilitates. 

The Code Group’s work extended to other agencies and bodies in 2022–23, such as APRA, the Australian Reports and Analysis Centre (AUSTRAC) and the Australian Small Business and Family Enterprise Ombudsman (ASBFEO). 

At the heart of the Code Group’s engagement is a commitment to improvement. It regularly consults with stakeholders on specific issues of Code compliance. It values ongoing stakeholder engagement and, looking forward, will consult widely again as it aims to establish priorities and improve compliance with all five Codes across the respective industries.
 

Previous section - AFCA’s Systemic Issues function

Next section - Stakeholder engagement