The Financial Services Council (FSC) has called on financial institutions to improve their response time to incidents, saying that action was urgently needed if they were going to restore consumer trust and suggesting that company culture could be to blame.
The call comes in the wake of the Australian Securities and Investments Commission’s (ASIC’s) Report 594, which found that organisations were taking “far too long” to identify, report and act on significant breaches that were leading to consumer detriment.
The regulator found that these delays were causing unnecessary stress and prolonged monetary loss for consumers.
“More than ever, financial institutions need to embrace a sense of urgency to respond to incidents so that consumers can have wrongs put right as soon as possible. Tardy breach reporting and dragging out the remediation process erodes confidence in the system,” FSC chief executive, Sally Loane, said.
The FSC said that financial institutions should investigate whether company culture was leading to poor compliance outcomes, suggesting that processes for finding and reporting problems to ASIC could be more efficient.
This came after TAL, among other insurers, faced extensive questioning by the Royal Commission last week into its company compliance practices and inefficiencies.
The FSC also supported ASIC’s recommendation that there needed to be an industry accepted standard on what constitutes a significant breach and the regulator’s earlier suggestion that civil penalties be introduced for failure to report breaches within required timeframes.