A systemic issue refers to a problem that impacts not just an individual complainant, but potentially affects a broader group of consumers. Consumer complaints can serve as critical indicators of underlying systemic issues within a financial firm.

AFCA’s role in identifying and reporting systemic issues benefits consumers who have not lodged a complaint with AFCA, but who may, nonetheless, have been impacted by a systemic issue. The early identification and resolution of systemic issues can reduce consumer complaints and help to minimise consumer harm.

AFCA is not a regulator. We operate within the broader regulatory framework by providing information to regulators in accordance with our obligations. We are obligated to report under both section 1052E of the Corporations Act 2001 and ASIC’s RG 267. We report systemic issues when required to ASIC, APRA, the Office of the Australian Information Commissioner and the Australian Taxation Office (ATO). Our reports to regulators ensure they are promptly informed of issues within the industry and can take action as they deem appropriate.

Impact of our systemic issues work

• Identified 1,574 potential systemic issues
• Referred 225 investigations into systemic issues to financial firms
• Investigated and addressed systemic issues, resulting in remediation for 159,051 consumers and small businesses
• Secured $44,706,897 in remediation and refunds for consumers
• Restored incorrectly cancelled general insurance policies and corrected credit and repayment histories on consumer credit reports
• Reported 97 systemic issues to regulators
• Resolved 77 investigations into systemic issues with financial firms
• Reported 137 matters under section 1052E(1)–(3) of the Corporations Act 2001, including:
  • nine serious contraventions of the law
  • 125 reports concerning financial firms’ refusal or failure to implement AFCA determinations (73 related to potential CSLR claims)
  • two reports on settlements requiring further investigation
  • one additional reportable matter.

Systemic Issues transformation

Our Transformation Project is focused on enhancing our systemic issues function through data-driven analytics. This initiative aims to generate insightful reports and resources and effectively communicate the impact of our work to regulators, consumers and financial firms.

This project addresses Recommendations 12 and 13 of the AFCA Independent Review, which concentrated on systemic issues. These recommendations arose from stakeholder feedback concerning perceived role overlaps between AFCA and ASIC, particularly in light of recently introduced breach reporting obligations for financial firms.

To avoid duplication and overlap, we close investigations when a firm reports an issue to ASIC and is already engaged with ASIC on the same matter. Financial firms are encouraged to inform us as early as possible if they have reported the same issue to a regulator.

AFCA has made significant progress in transforming our approach to systemic issues, including:

• Establishing strong data analytics capabilities within our team.
• Ensuring timely communication of industry issues to regulators to facilitate prompt action.
• Proactively sharing data, insights, and case studies with financial firms to drive industry-wide improvements.
• Delivering new training programs to enhance our team’s expertise in systemic issues.
• Implementing new processes and tools to boost internal efficiencies.
• Publishing quarterly editions of the AFCA’s Systemic Issues Insights Report, which can be accessed on our website:afca.org.au/systemicissues

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