Banks have improved their compliance with the Banking Code of Practice but need to strengthen protections for vulnerable customers, the Banking Code Compliance Committee (BCCC) has found in its latest Compliance Statement Report.
The report highlights encouraging steps taken by banks, particularly in response to an inquiry into deceased estates. But it also points to gaps in how banks respond to vulnerability and ensure guarantors are properly informed.
Improvements in handling deceased estates
The report found banks have made meaningful changes following the BCCC’s 2023 inquiry into deceased estates. These include stronger internal controls, more responsive processes, and better reporting of breaches.
Chair of the BCCC, Ian Govey AM, highlighted the impact of this work.
“The changes that banks have made are already leading to improvements in how they identify, report, and remediate breaches,” Mr Govey said.
“It is encouraging to see banks act on our recommendations and deliver more consistent and compassionate service to customers and their representatives.”
Concerns about vulnerability
Despite progress, the BCCC noted cases where banks failed to act on clear signs of vulnerability. Such failures can cause avoidable financial and emotional harm to customers already at risk.
“Banks must ensure their frontline staff are equipped to recognise and respond appropriately to signs of vulnerability,” Mr Govey said.
“When banks overlook these signs, they risk compounding hardship for customers who most need support. Strengthening practices will help banks protect vulnerable customers at the same time as building trust.”
Guarantor obligations need continued focus
The report highlighted ongoing risks associated with guarantors. In some cases, banks did not provide clear, timely, or complete information, leaving guarantors exposed to serious financial consequences.
“Banks have committed to make robust assessments of guarantors’ circumstances and to communicate with them clearly and transparently,” Mr Govey said.
“Getting this right is critical to protecting guarantors from taking on obligations they do not fully understand or cannot meet. The consequences of failures here can be significant.”
Looking ahead
The BCCC said it expects banks to build on progress as the new 2025 Code of Practice is implemented.
It will closely monitor how banks translate their Code commitments into fairer and more consistent outcomes for customers, particularly those experiencing vulnerability.
“As the 2025 Code takes effect, our focus will be on ensuring the commitments on paper deliver real improvements in practice,” Mr Govey said.
“Ultimately, strong compliance is about earning and maintaining the trust of customers, especially the most vulnerable.”
Read the BCCC's Compliance Statement report.
About us:
The purpose of the BCCC is to monitor and drive best practice Code compliance.
To do this, it:
- examines banks’ practices
- identifies current and emerging industry-wide problems
- recommends improvements to bank practices
- sanctions banks for serious compliance failures, and
- consults and keeps stakeholders and the public informed.
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