The corporate regulator is seeking feedback on its newly proposed internal dispute resolution rules on how financial services firms should handle customer complaints, including those on social media.
Financial institutions may have to accept grievances aired online (for example, on social media platforms) as legitimate customer complaints under the new internet dispute resolution (IDR) rules being proposed by the Australian Securities and Investments Commission (ASIC).
All ASIC-regulated financial firms are required by legislation to have an IDR system that meets the corporate regulator’s standards. However, the corporate watchdog’s deputy chair, Karen Chester, noted that “there is room for much improvement when it comes to handling consumer complaints” in the financial services industry.
“The Ramsay Panel Review, recent ASIC research, case studies before the financial services royal commission and our own supervisory work have all identified shortcomings in consumer complaints handling,” Ms Chester said.
“Consumers expect and need a fair, timely and effective way to have their complaints dealt with, and to be provided redress where appropriate. The absence of such effective redress, and the failure of firms to identify and look into systemic complaints, were key findings of the [financial services royal commission] and the prudential inquiry into the [Commonwealth Bank of Australia].”
The regulator has, therefore, released new proposed standards for public consultation in a bid to make the complaints-handling performance of financial firms transparent.
ASIC’s proposed updates to Regulatory Guide 165 include:
ASIC said the proposed new standards and data reporting requirements would “continue to forge the effective relationship between IDR and the work of [the Australian Financial Complaints Authority]”.
“Firm performance in how they handle customer complaints, and their interaction with AFCA, will increasingly be in plain sight. This greater transparency will inform consumer and broader public understanding of how well firms treat their customers,” Ms Chester said.
“For a regulator, it also provides an invaluable insight into how non-financial risks are being managed by the firm and, ultimately, the board. ASIC expects greater investment and attention by boards to their own internal customer complaints data and complaints-handling performance.”
Feedback to ASIC’s proposed IDR rules is to be provided by 9 August 2019, with the corporate regulator aiming to publish the new standards in its updated RG 165 by the end of 2019.
Additionally, the regulator said a separate consultation on the publication of IDR data will be launched in early 2020.
Tas Bindi is the features editor for The Adviser magazine. She writes about the mortgage industry, macroeconomics, fintech, financial regulation, and market trends.
Prior to joining Momentum Media, Tas wrote for business and technology titles such as ZDNet, TechRepublic, Startup Daily, and Dynamic Business.
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