Five Australian lenders have agreed to improve their compliance measures and controls for third-party access to deposit accounts, following an industry-wide review from the corporate watchdog.
The Australian Securities and Investments Commission (ASIC) has revealed that five banks have agreed to strengthen their fraud protection systems in the wake of a review by the regulator that found that “banks could do more to manage the risks to customers associated with third party access to money in customers’ accounts”.
ASIC’s review, outlined in a report entitled Improved Protections for Deposit Accounts with Third-Party Access, examined the policies, procedures and controls that banks have in place to prevent fraud and unauthorised transactions for consumers who have deposit accounts that can be operated by their adviser.
The findings of the review include:
As a result, the banks involved have agreed to make improvements to their current practices, including:
ASIC deputy chair Peter Kell said that all called for more transparency between lenders and their customers.
“Banks and advisers are often entrusted with their customers’ life savings. They must be clear in communicating to their customers about any authority the customer's adviser has over their money,” he said.
“Moreover, banks must also have robust systems in place that ensure their customers’ funds are protected from the risk of fraud.”
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