Australian regulators on Tuesday (Sept. 25) criticized top banks in the country for what authorities called inadequate reporting of breaches of financial law. Reports in Reuters said the Australian Securities and Investments Commission (ASIC) announced the completion of its review into Australia’s top four banks and how they managed and remediated issues of non-compliance. The ASIC slammed the banks’ processes as “unacceptable.”
“Many of the delays in breach reporting and compensating consumers were due to the financial institutions’ [FIs] inadequate systems, procedures and governance processes, as well as a lack of consumer-oriented culture,” said James Shipton, the ASIC’s chairman.
Regulators probed the banks’ breaches of law in a review scrutinizing operations between 2014 and 2017, according to reports. Those breaches resulted in $361.9 million in losses to customers of banks, while the ASIC noted that full remediation had not been completed. On average, banks took more than five years from when the breach occurred to when customers were remediated, the ASIC found.
“There is an urgent need for investment by financial services institutions in systems and processes, as well as commitment and oversight from boards and senior executives to address these significant failings,” Shipton added.
The findings come as the ASIC faces continued criticism for what some dub as “too lenient” on top financial institutions. Reports said the ASIC is considering enforcement action in response to the failings in how these FIs report breaches.
They also come as regulators in the country are taking a generally harsher stance against bank misconduct, particularly in the small business (SMB) banking and lending sectors. The nation named a new Small Business Minister last month, part of a broader government reshuffling that placed SMBs closer into focus for policymakers.