Australian Financial Complaints Authority (AFCA) will push the banking sector to undertake a cultural transformation as part of a “fairness revolution” by the new one-stop-shop ombudsman set up to deal with financial complaints.
Speaking at AFR Banking and Wealth Summit in Sydney today, AFCA Chair the Hon Helen Coonan said AFCA data showed the financial services industry has a long way to go to reduce and resolve disputes with their customers.
“Poor culture in financial institutions has been fingered as the main culprit that permitted a slew of bad practices, appalling treatment of consumers and small businesses, and in many cases arrogant indifference to regulatory and compliance risk,” said Ms Coonan.
“The task ahead of banks to address the poor culture deeply embedded throughout their organisations is, no doubt, a monumental one.
“A good place to start this cultural revolution is for banks to start treating their customers fairly, to improve internal complaint handling and to stop problems occurring in the first place.
“The data and intelligence that AFCA has about disputes – and we have already had over 23,000 complaints in just four months – provides ample evidence to drive this much-needed cultural change in our banking sector – change that the community is crying out for and what we’re calling the ‘Fairness Revolution’.”
Ms Coonan said AFCA was not going to sit by passively while firms adopt a casual and unresponsive approach to resolving these important disputes.
“People’s lives and businesses are at stake in these disputes. The stress and the anxiety that these matters cause can be immense,” said Ms Coonan.
“We expect banks to respond to us when requested, in a timely manner. We have a refer-back process, and with some of the largest institutions, we are finding that one in four times, we are not getting a response.
“Some of the large institutions have responded appropriately and are engaging − but many are failing to scale up their internal dispute resolution functions and settle issues that should be settled earlier or are raising technical issues on jurisdiction rather than seeing AFCA as a facilitator to the resolution of these disputes and to restore some semblance of confidence and trust in the process.”
AFAC requires all financial firms to engage with them as requested, to provide documentation sought, and expects proactive engagement in good faith.
“If we have evidence of financial firms failing to cooperate in the way that is necessary, we will be calling this out in the strongest possible terms,” Ms Coonan said.
“But, we will also be there as a safeguard for consumers and small businesses to provide quick, efficient and final determinations against banks whose conduct infringes notions of fairness.
“This is what access to justice post-Royal Commission requires. This is the fairness revolution in action, putting customers first”.