Sean Hughes

The Banking Code Compliance Committee (BCCC), the independent body that monitors banks’ compliance with the Banking Code of Practice, has released its 2025–26 Annual Report, highlighting where bank practices have improved and where further action is needed.

Over the past year, the BCCC’s monitoring and oversight contributed to stronger banking practices and customer protections, including improvements in the management of deceased estates, basic bank accounts and Bank@Post services.

The report also highlights the BCCC’s increased use of compliance data to identify emerging issues and hold banks accountable for meeting their Code commitments, alongside its continued focus on customers experiencing vulnerability.

BCCC Chair Sean Hughes said the past year demonstrated the important role independent oversight plays in driving practical changes in bank practice.

“Most banks reported strengthening their systems, staff training and monitoring for deceased estates. Banks also corrected problems with basic account information and fees, and all banks in our Bank@Post review made Code and complaints information easier for customers to find,” Mr Hughes said.

“These changes matter because they affect customers directly. Our job is to identify where practice falls short, push for improvement and keep checking that banks have addressed the problems we find.”

The Annual Report also highlights how the BCCC strengthened its use of compliance data to identify problems and target its monitoring.

Under the more detailed reporting framework introduced with the 2025 Banking Code, banks reported 9,326 breaches, with a financial impact on customers of $27.7 million.

Further analysis found that 84% of breaches reported from July to December 2025 were attributed to staff-related causes, up from 75% in the previous reporting period. This is also higher than in earlier periods, when banks attributed 72% of breaches to human error-related factors from July to December 2024 and 75% from January to June 2024.

The sustained prevalence of staff-related causes suggests banks need to look beyond training alone and consider whether stronger supervision, processes and controls are needed to prevent breaches from recurring.

The stronger framework gives the BCCC a clearer view of where problems occur and how they are detected, helping it identify patterns and direct greater scrutiny towards higher-risk areas.

Mr Hughes said the data helped the Committee decide where to focus its work.

“The numbers tell us more than how many breaches have occurred. They help us identify patterns, see where problems may not be detected early enough and focus our oversight where it can have the greatest impact,” Mr Hughes said.

“Better information also helps us test whether recurring breaches point to weaknesses in systems, processes, training or controls.”

The BCCC also continued its work to strengthen protections against financial elder abuse. A joint review with the Customer Owned Banking Code Compliance Committee found significant gaps in the information banks provide, including limited translated and Easy English material and very little information tailored to older First Nations customers.

The review made eight recommendations aimed at improving the information and support available to customers, while helping banks better identify signs of elder abuse and intervene earlier to reduce the risk of harm.

“Financial elder abuse can be difficult to recognise, so customers need clear information to help them identify warning signs, understand issues such as powers of attorney and know where to get specialist support,” Mr Hughes said.

“Our review identified where banks could do better and set out clear recommendations to strengthen the support available to customers. An important part of our role is identifying weaknesses and driving changes that better protect customers.”

In 2026–27, the BCCC will continue to strengthen its oversight and focus on issues affecting customers. Key priorities include:

• finalising its inquiry into how banks support customers and communities affected by branch closures
• examining protections for customers when debts are sold
• reviewing how banks communicate decisions about financial-difficulty assistance
• contributing to the independent review of the Banking Code and the BCCC’s effectiveness
• further developing how it measures the impact of its monitoring
• progressing work towards named reporting.

Mr Hughes added, “Our focus in the coming year is on areas where customers may be most exposed to harm, including branch closures, debt sales and financial difficulty decisions. The Committee is determined to ensure that banks meet the standards the community expects.”

The purpose of the BCCC is to monitor and drive best practice Code compliance.

To do this, it:

• examines banks’ practices
• identifies current and emerging industry-wide problems
• recommends improvements to bank practices
• sanctions banks for serious compliance failures, and
• consults and keeps stakeholders and the public informed.

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The review will consider the effectiveness of the BCCC’s role in independently monitoring banks’ compliance with the Banking Code of Practice, including its governance, functions and approach to oversight.

Mr Kell is widely regarded as one of Australia’s most experienced consumer protection and financial services regulators, including as a former Deputy Chair of the Australian Securities and Investments Commission and the Australian Competition and Consumer Commission, and former Chief Executive of CHOICE.

BCCC Chair Sean Hughes said the independent review is an important part of ensuring the Committee continues to provide effective and credible oversight of banks’ compliance with the Banking Code of Practice.

“Independent oversight is essential to ensuring the commitments banks make through the Banking Code of Practice translate into real outcomes for customers,” Mr Hughes said.

“This review is an opportunity to take a close look at how the BCCC operates, what is working well and where its approach, powers or arrangements could be strengthened to support effective oversight of the Code.

“The Committee looks forward to contributing to the review and will engage openly and constructively throughout the process. We encourage banks, consumer representatives, regulators and other interested stakeholders to participate in the review and share their experience of the BCCC and its role in the self-regulatory framework.”

Mr Kell will concurrently conduct the Australian Banking Association’s independent review of the Banking Code of Practice.

The two reviews have distinct purposes and will be conducted under separate Terms of Reference. The BCCC sees value in the concurrent approach, particularly for stakeholders who may wish to contribute to both processes, while maintaining the independence and distinct focus of each review.

Further information about the BCCC review, including its Terms of Reference and opportunities to participate, will be available shortly.

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Sean Hughes

The Banking Code Compliance Committee (BCCC) has found that banks risk overlooking deeper weaknesses in systems, processes and controls by attributing most breaches of the Code of Practice to staff error.

In its latest Compliance Statement Report^[1], the BCCC found that staff-related causes accounted for 84% of the 9,326 breaches reported by banks between July and December 2025. Staff training was reported as a corrective action for 83% of breaches, either alone or alongside other measures.

Chair of the BCCC Sean Hughes said staff error did not always explain why a breach occurred.

“Staff error may describe where a problem became visible, but it does not necessarily tell us what allowed it to happen,” Mr Hughes said.

“If compliance depends heavily on manual steps, individual judgement or staff memory, banks need to consider whether stronger systems and process controls could prevent problems recurring.

“Training is important, but it cannot be the default response to every breach involving a staff member.”

The report found that breaches attributed to policy or process deficiencies had a disproportionately large effect on customers. They accounted for only 7.9% of reported breaches but affected more than 1.26 million customers and caused $15.25 million in customer financial impact.

Mr Hughes said breach data should help banks identify underlying problems and choose corrective actions that address their root causes.

“Identifying a breach should be the beginning of the analysis, not the end,” he said.

“Banks need to understand why a breach occurred and whether changes to systems or processes would provide a more lasting solution.”

The report also found that banks continue to miss opportunities to recognise and support customers experiencing vulnerability.

Banks reported 1,528 breaches of vulnerability commitments, affecting 10,000 customers and resulting in $5.52 million in customer financial impact.

System and process issues accounted for 60% of customers affected by vulnerability-related breaches, but banks most frequently reported staff training as the corrective action.

“Banks need to ensure that their frameworks to support vulnerable customers work reliably when customers interact with the bank,” Mr Hughes said.

“Customers should not have to depend on a staff member recognising the right signal or remembering a manual step. Staff need reliable systems, clear escalation pathways and practical safeguards to support them so they can respond appropriately and consistently.

“The commitments banks make in the Code are intended to ensure customers receive fair outcomes, and banks need to deliver on their commitments.”

The report’s findings indicate that banks need to use breach data to strengthen the systems, processes and safeguards that shape customers’ experiences and reduce the risk of the same problems recurring.

Read the report

The purpose of the BCCC is to monitor and drive best practice Code compliance.

To do this, it:

• examines banks’ practices
• identifies current and emerging industry-wide problems
• recommends improvements to bank practices
• sanctions banks for serious compliance failures, and
• consults and keeps stakeholders and the public informed.

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Notes:
[1] Compliance Statement Report

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Sean Hughes

The Banking Code Compliance Committee (BCCC) has called on banks to keep a heightened focus on their management of deceased estates, after a review found that further work and commitment is needed to ensure improvements are working in practice. 

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