In 2021, AFCA was pleased to take part in the Independent Review of its functions and performance.

The Independent Review recommendations – and the areas for improvement identified in the report – provided AFCA with the opportunity to not only progress important existing work but to also commence additional projects that would support our goals.  

With the project now coming to an end, all recommendations will be finalised by the end of 2024.

We are delighted with the outcomes of this project.

Key achievements

• Published new versions of AFCA’s Rules and Operational Guidelines on 1 July 2024, marking one of the most significant updates in our history.
• Developed a new consultation format to ensure we receive comprehensive and actionable feedback.
• Created enhanced guidance for managing additional issues that arise during a complaint.
• Adjusted AFCA’s compensation caps and monetary limits in line with Consumer Price Index and wage indexation.
• Reviewed and confirmed the introduction of a new funding model.
• Implemented a new case management system that offers improved visibility into timeframes at various stages of a case.
• Updated the AFCA website to provide clearer information on the expected duration of cases at different stages of the process.
• Commissioned a report to review 30 cases that proceeded to determination, which confirmed AFCA’s procedures ensure fairness and uphold impartiality in all circumstances.

New Approaches and consultation process

In January 2024, AFCA released its final Lending to Small Business Approach document (formerly known as Appropriate Lending to Small Business), accompanied by a consultation feedback report detailing our responses to formal submissions and stakeholder input.

We published all non-confidential submissions in November 2023. Additionally, we unveiled the final Responsible Lending Approach document in December 2023.

The Approaches were developed in response to stakeholder requests for clearer guidance on AFCA’s practices and to ensure consistent outcomes in these complex areas.

To ensure they effectively address stakeholder needs and do not lead to unintended consequences, we plan to review both Approaches in 2024.

New member resources on systemic issues

AFCA introduced new tools and resources to help members manage and address systemic issues more effectively. Available on the AFCA member resources webpage, these include insights into AFCA’s process for identifying, reporting and resolving systemic issues.

The resources, along with AFCA’s Systemic Issues Insights Reports, form a central hub for learning about our approach and response to systemic issues.

They were developed in response to stakeholder feedback and Recommendations 12 and 13 of the Independent Review.

The Independent Review Recommendations came about due to feedback from stakeholders who were concerned about a perceived overlap in role between AFCA and ASIC in an external environment where new breach reporting obligations are expected of financial firms.

Firms were concerned that there was a duplication in work by reporting to ASIC and working with AFCA on systemic issues.

The new resources confirm and clarify that AFCA will close an investigation where we become aware that a firm has reported an issue to ASIC and the firm is engaging with ASIC on the same issue and for the same outcome. This is to ensure we prevent actual overlap.

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