The annual report of the Banking Code Compliance Committee (BCCC) is out!
You’re joining a very small audience — governance nerds, the team of people at each bank who are tasked to check it out — exploring its contents.
Its main job is to regulate the application of the Banking Code of Conduct, a rule book about how banks treat their customers.
It’s meant to have the “weight of law” because it is written into standard contracts for products like loans.
But in reality, it is down to how different institutions take it on, and the BCCC has a focus on systemic issues rather than individual cases.
Hold on, the who-what?
The Banking Code Compliance Committee (BCCC) is a kinda-independent body that is full of well-meaning people with good reputations and a track record of working to help people, particularly those who are vulnerable.
But it is hard to take seriously.
The BCCC has few staff, extremely limited resources and its most serious sanction is — I hope you are sitting down — naming an institution.
Saying their name! Like Lord Voldemort.
The BCCC generally only gets its Big Stick out once a year.
This year, it actually said “Bank of Queensland” when describing an institution that on more than 2,500 occasions failed to stop or refund interest and fees on the accounts of deceased customers over a period of years.
(Of course, the bank had “ample time to improve and ensure the effectiveness of its processes and controls to prevent recurrence of its breaches” and didn’t).
Other banks that did bad things that year? Stole money from clients? Failed to support vulnerable people in hardship?
They will be called “a bank” in the published investigation summary.
You will never know if it is your bank.
You could be with the worst, most Code-crushing bank in Australia.
You will never know.
And the reason I say “kinda independent” is that despite overseeing breaches by banks, all of the powers the BCCC holds are given to it by the Australian Banking Association (ABA) — the peak body of the industry it oversees.
The ABA is also the sole funder of the body, to the tune of $2.5 million last year.
In recent years, the BCCC asked the ABA for more powers and the ABA said… No.
If you think that sounds fine and normal from a governance standpoint, you are set for a long and profitable career in Australian business, particularly financial services.
But there is a big positive change.
One of the BCCC’s key asks is finally happening – the Big Stick is getting bigger.
The report notes an intention to:
“…transition our Compliance Statements to named reporting – in progress and scheduled for implementation in 2025–26”
As ever, you can’t take the BCCC too seriously — the industry certainly doesn’t.
When the BCCC asked the ABA for the power to force banks to publish sanctions on their own websites… not a chance!
“The ABA considered this inconsistent with the self-regulatory nature of the Code. We retain the power to publish naming sanctions on our website and in our annual report”.
Given the tiny number of people who visit the BCCC website or read its annual report, they’d be better off printing flyers and handing them outside of train stations.
Even one train station.
OK, so what did they do?
Here are some of the highlights of the report, which you can read for yourself:
There were 14,892 Breaches of the Code from January to June 2024, impacting 5.1 million customers with what was deemed $54.6 million in “financial impact”.$4 million was returned to relatives of deceased customers who had been charged fees.
