Banking Code. Compliance Monitoring Committee. Workplan 2017 to 2020

Transcription

1 Banking Code Compliance Monitoring Committee Workplan 2017 to 2020

2 1. Executive Summary The Banking Code Compliance Monitoring Committee (CCMC) is an independent compliance monitoring body established under clause 36 of the 2013 Code of Banking Practice (the Code). Its purpose is to assure the community that the Code-subscribing banks (banks) honour their Code obligations to their customers. The CCMC is required under its Mandate to publish an annual business plan, of which this Workplan forms part. The Workplan has been designed to assist the CCMC to achieve its purpose and priorities for in a focussed, efficient and effective manner. This is a three-year strategic Workplan, the key objectives of which are: Monitor banks' practices Identify and report on industry wide problems Encourage continuous improvement Appendix 1 provides the Workplan and timetable for the reporting period of 1 July 2017 to 30 June Appendix 2 provides the Workplan and timetable for the period 1 July 2018 to 30 June In developing this Workplan, the CCMC has assessed the current risks to Code compliance and directed its resources to address the highest areas of concern. It will continue to assess these risks and adjust the activities to be undertaken accordingly. 2. Reviews of the Code and the CCMC Independent reviews of both the CCMC and the Code were conducted in 2016, with the final reports published in February The CCMC Review made six recommendations to improve the effectiveness and visibility of the Committee s work. The CCMC considers the independent review of its operations to represent a guide to robust monitoring of the Code, these recommendations have been incorporated into this Workplan. The Code Review separately made 99 recommendations, including 19 which relate specifically to the CCMC. The ABA has indicated that it supports the majority of these recommendations, either in full or in part. Once the ABA has consulted with stakeholders regarding the recommendations, it will commence redrafting the Code. It will provide quarterly updates of the progress made in relation to this redrafting. Implementation and the transitional period for banks to the new Code will depend on the extent that the enhanced Code requires changes to policies, procedures, systems, staff training and internal communications. It is likely a revised CCMC Mandate will become effective on the date banks adopt the revised Code. Until such time, the CCMC will operate under its current Mandate. CCMC Workplan Page 2 of 12

3 3. Purpose Statement and Key Priorities The CCMC has revised its Purpose Statement in light of the recommendations made in the Code and CCMC reviews and within the current framework of the existing Mandate. Purpose The purpose of the CCMC is to assure the community that subscribing banks honour their Code obligations to their customers. To do this the CCMC will: Monitor banks practices Identify and report on industry wide problems, and Encourage continuous improvement. Key priorities The Workplan represents the CCMC s top priorities for achieving these objectives: Update the process for the investigation of Code breach allegations to reflect a risk based approach. Conduct at least one major Own Motion Inquiry and one follow-up Inquiry each financial year. Develop enhanced data collection processes and systems to inform risk based assessment. Engage with all stakeholders to assist with the transition to the new Code as the need arises. 4. Updates to the Workplan The activities listed in the appendices represent the likely tasks that will be completed by the CCMC. The anticipated introduction of the new Code and CCMC Mandate during the first year of the Workplan will, however, mean that it may be subject to change. The Workplan will be regularly reviewed and revised to ensure that the highest priority work is always completed first. Any changes to the Workplan will be communicated to stakeholders as early as possible. 5. Background The CCMC s Powers and Functions The CCMC s powers and functions are set out in its Mandate. The Mandate is published by the Australian Bankers Association (ABA) along with the Code. By adopting the 2013 version of the Code, the subscribing banks have endorsed this Mandate. The Code framework states that the CCMC has the following functions: to monitor banks compliance with the Code s obligations to investigate, and to determine, an allegation from any person that a bank has breached the Code, and to monitor any aspects of the Code that are referred to the CCMC by the ABA. The Code The ABA is responsible for the Code. The Code prescribes the minimum standards that each Codesubscribing bank is required to uphold when providing services to individuals and small businesses in the provision of retail banking services. Code subscribers have made a commitment to work continuously to improve the standards of practice and service in the banking industry, promote better informed decisions about their services and act fairly and reasonably in delivering those services. CCMC Workplan Page 3 of 12

4 Currently 13 Banking Groups subscribe to the Code. This represents around 95% of the Retail and Small Business banking sector. The principles and obligations set out in the Code therefore apply to the majority of retail banking services delivered to individuals and small businesses across Australia. The Code forms an important part of the broader national consumer protection framework and the financial services regulatory system. Once a bank has subscribed to the Code, it becomes part of the enforceable contract between the customer and the bank. A breach of the Code by a bank is a breach of that contract. Clause 36(d) of the Code requires banks to ensure the CCMC has sufficient resources and funding to carry out its functions satisfactorily and efficiently. Each Code-subscribing bank therefore, contributes to the funding of the CCMC. 6. The CCMC Secretariat Team Role CEO Compliance Manager Investigations Manager Compliance Analyst Compliance Analyst Responsibilities Program delivery, stakeholder liaison and Secretariat support. Compliance management and execution. Investigations case management and execution. Execution/Reporting. Reporting and Secretariat support. 7. Approvals Prepared by Approved by Sally Davis Chief Executive Officer Christopher Doogan AM Independent Chairperson CCMC Workplan Page 4 of 12

5 Appendix 1: The Workplan Objective: Monitor banks practices Activities 1.1 Enhance, and where appropriate, develop data collection processes and systems in line with Mandate and Code requirements. 1.2 Review and enhance current monitoring procedures to: a) establish a view of best practice in monitoring, and b) incorporate further risk based assessment of risks and incorporating additional key risk indicators identified under 1.2 above. 1.3 Develop procedures to identify, on a risk based approach, those allegations that a Code subscriber has breached the Code that should form part of monitoring activity or be investigated under clause 6.1(a) of the Mandate. 1.4 Conduct the Annual Compliance Statement (ACS) program Q1 Q2 Q3 Q4 Measure Meetings held with banks and provisional working group formed by 31 August Revised data gathering procedures in place by 30 June Assess any IT needs by 31 December 2017 and implement these requirements by 30 June Establish view of best practice in monitoring by 31 December Develop revised processes and procedures in relation to monitoring to align with Mandate requirements by 30 June Develop Risk Model to incorporate additional key risk indicators from external sources by 30 June Revised procedures in place by 31 December % of Annual Compliance Statements returned by banks by 31 August Analysis of ACS data completed by 1 October Onsite ACS visits with each Code-subscribing bank completed by 30 October Develop the Annual Compliance Statement Program. Distribute a draft ACS to banks for consultation by 1 April Committee approval of the final ACS by 30 May Final ACS distributed to banks for completion by 1 June Hold a workshop with a bank working group by 30 June CCMC Workplan Page 5 of 12

6 1.6 Conduct an Own Motion Inquiry into bank s compliance with clause 37 of the Code (Internal Dispute Resolution). 1.7 Conduct a follow-up Inquiry into banks compliance with clause 28 of the Code (Financial Difficulty). 1.8 Monitor any matters referred to the CCMC by the ABA. Where appropriate, conduct Investigations of any matters referred by the ABA under clause 6.1(c) of the Mandate. Inquiry Scope document issued to banks by 30 November Data gathering, including any onsite verification, conducted by 28 February Final report approved and issued by 30 June Inquiry Scope document issued to banks by 31 March Data gathering completed by 31 May Final report approved and issued by 30 September No more than 3 cases, or 10% of the total number of cases whichever is the greater, where the investigation is not completed within 90 days. CCMC Workplan Page 6 of 12

7 Objectives: Identify and report on industry wide problems & encourage continuous improvement Activities 2.1 Prepare and publish an Annual Report about the CCMC s activities. The Annual Report content and format to take account of recommendations made in the CCMC Review. 2.2 Develop an agreement with FOS to facilitate information exchange between FOS Systemic Issues team and the CCMC. 2.3 Utilise the results of monitoring work to promote the CCMC s operations and ability to influence improvements in banks compliance with the Code through: Engagement with Financial Counsellors, state based legal aid centres and community legal organisations. Participation in relevant community events in partnership with the Financial Ombudsman Service (FOS). Engagement with Consumer Affairs Departments in each State Q1 Q2 Q3 Q4 Measure Communication consultant to complete review of format and content of the Annual Report by 30 September Final draft version of the Report to be provided to the Committee for approval by 1 November Annual Report published by 15 November 2017 on the website and by . Printed copies to be distributed to key stakeholders by 25 November Agreement with FOS operational by 30 June Meet with representatives of these stakeholders following the release of major reports. Attend and present at consumer advocate conferences. Ensure engagement with community legal centres to provide understanding of the CCMC s activities and operations. Prepare at least two articles for inclusion in newsletters and bulletins issued by relevant consumer advocacy organisations. Develop the use of webinars and online training modules by 31 December Attend at least two community events in conjunction with FOS Community Outreach program. CCMC Workplan Page 7 of 12

8 2.4 Increase awareness amongst small business of the CCMC s operations and ability to influence improvements in banks compliance with the Code through engagement with: the Australian Small Business and Family Enterprise Ombudsman (ASBFEO), and small business advocates, associations and other organisations as required throughout the year. 2.5 Engage with Australian Securities and Investment Commission (ASIC,) the Financial Ombudsman Service (FOS) and other relevant Forums to create a common understanding of respective roles where jurisdictions overlap. 2.6 Regularly engage with key industry stakeholders through: Attend quarterly meetings with the ASBFEO. Develop a referral protocol with the ASBFEO to refer issues to the CCMC by 31 December Attend meetings with small business advocates as required. Attend Small Business conferences as required. Meetings held with FOS on a quarterly basis. Meetings held with ASIC on a quarterly basis. Quarterly meetings with the ABA. Regular meetings with the ABA including attendance by Chair and CEO at one ABA Council meeting. Onsite meetings with Code subscribers including meetings with bank CEOs and Customer Advocates. Liaison with Code subscribers through an Annual Bank Forum and quarterly stakeholder meetings. Publication of a quarterly bulletin setting out the CCMC s work over the quarter and planned activity for the next quarter. Attend one ABA Council meeting. Meetings held as required or requested by stakeholders. Annual Bank Forum in March Quarterly stakeholder liaison group. Bulletins to be issued in September 2017, December 2017, March 2018 and June CCMC Workplan Page 8 of 12

9 Respond to Code Review developments Activities 3.1 Review and amend CCMC s governance arrangements to ensure they remain appropriate with respect to changes in the CCMC Mandate and the Code. 3.2 Develop branding and key statements, in line with CCMC Mandate and Code changes, to be used consistently across all internal and external communications, including presentations, seminars, conferences and websites. 3.3 Engage a Communication Consultant to develop a communications strategy that leverages off the Code and CCMC review recommendations. The strategy would also consider the most appropriate format of the Annual Report and Own Motion Inquiry reports to promote stakeholder awareness and confidence in the monitoring activity. 3.4 Review and where appropriate amend all the published Guidance Notes to ensure they remain appropriate, subject to any changes to the Code and the CCMC Mandate. 3.5 Build the skills and resources of the Code team in response to the Code and CCMC Review recommendations Q1 Q2 Q3 Q4 Measure Revised arrangements in place by date Mandate and Code changes become effective. New branding and key statements in place by date Mandate and Code changes become effective. New website in place by date Mandate and Code changes become effective. Revised format used in publication of the Annual Report and Own Motion Inquiries. Communications strategy in place by 30 June Ongoing identification of topics for Guidance Note development. Consultation with stakeholders where appropriate. Publish Guidance Notes on the CCMC website as appropriate. Conduct recruitment for one additional team member where the budget allows. Existing and new team members to participate in relevant training by 30 June Engage with new and potential subscribers to the Code. Meetings with new Code subscribing banks as required. CCMC Workplan Page 9 of 12

10 Conduct the activities of the CCMC in accordance with the requirements of the Mandate through: the setting of operating procedures (clause 1.4) the development of an annual business plan (clause 1.6), and the discharge of its responsibilities (clause 4.1). Activities 4.1 Review and amend CCMC Guidance Notes regarding the CCMC s interpretation of its Mandate, where a need for such guidance is identified. 4.3 Develop the Committee s Strategic Plan for , including the Workplan activities for Q1 Q2 Q3 Q4 Measure All Mandate related Guidance Notes reviewed by 30 June All identified changes made and revised Guidance Notes published by 30 June Hold Committee Strategy day by 31 March Approval of Strategic Plan by 1 June Strategic Plan submitted to FOS and ABA by 30 June Develop the annual budget. Anticipated major budget items identified and draft budget provided to Committee by 31 March Approval of budget by 1 June Conduct meetings and the Committee s activities in accordance with good governance practice. Budget submitted to FOS and ABA by 30 June Meetings of the CCMC convened in accordance with clause 4.1 of its Mandate. Meeting papers provided on time and in requested format. Minutes issued in line with Key Performance Indicators. Provision of accurate action list in a timely manner for each meeting. CCMC Workplan Page 10 of 12

11 Appendix 2: The Workplan The activities listed below represent the likely tasks that will be completed in the period 1 July 2018 to 30 June These may, however, be subject to change, depending on changes to the Code and Mandate and considering the regulatory and economic landscape. Activities Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Objective: Monitor banks practices 1.1 Conduct the ACS program including onsite visits. 1.2 Continue to develop data gathering processes and systems to identify areas of risk to Code compliance. 1.3 Assess all reports of suspected breaches of the Code from all sources to inform the risk assessment to determine future monitoring. 1.4 Where appropriate, conduct an investigation with an individual Code-subscriber in respect of a report of a suspected breach of the Code in accordance with the terms of the Mandate. 1.5 Conduct an Own Motion Inquiry to understand how banks comply with new and amended Code obligations. 1.6 Conduct a follow up Inquiry into banks compliance with the Provision of Credit obligations. 1.7 Conduct an Own Motion Inquiry into Account Suitability. 1.8 Conduct a follow up Inquiry into banks compliance with the Dispute Resolution. 1.9 Conduct Own Motion Inquiries into aspects of Code compliance of individual banks, identified by referrals of suspected breaches and other risk based assessments Monitor any matters referred to the CCMC by the ABA, in line with the risk based approach. CCMC Workplan Page 11 of 12

12 Activities Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Objectives: Identify and report on industry wide problems & encourage continuous improvement 2.1 Prepare and publish an Annual Report. 2.2 Prepare and publish any industry data reports and results of Own Motion Inquiries and follow-up Inquiries. 2.3 Maintain meetings with ABA, ASIC, ASBFEO and FOS as detailed in Appendix Engage with working parties to interpret Code and Mandate obligations. 2.5 Engage with consumer and small business advocates and organisations (including any new or previously not identified organisations) to understand issues and risks in the provision of banking services. Provide training to these organisations and present at relevant conferences as required. Conduct the activities of the CCMC in accordance with the requirements of the Mandate through: the setting of operating procedures the development of an annual business plan the discharge of its responsibilities, and the arrangement of a periodic review of the CCMC 3.1 Review current Guidance Notes and amend where necessary. Develop new Guidance notes as required. 3.2 Review and amend where necessary the CCMC s operating procedures to ensure they remain consistent with Mandate requirements and good Governance principles. 3.3 Develop the CCMC s three year rolling strategic plan. 3.4 Develop the CCMC s annual budget. 3.5 Arrange a periodic review of the CCMC s operations and activities to coincide with any review of the Code initiated by the ABA. CCMC Workplan Page 12 of 12