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Breaches of the Banking Code may be more than staff error

Sun, 26 Jul 2026 21:25:50 +0000

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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Banks urged to keep focus on deceased estates

Thu, 09 Jul 2026 21:05:43 +0000

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.

In its report, Managing deceased estates: A follow-up review, the BCCC reviewed how 11 banks had responded to its recommendations for improving deceased estate management.

Eight of the 11 banks included in the review have taken steps to implement changes aligned to the BCCC’s 2023 recommendations, including improvements to systems, processes, product identification, monitoring arrangements and staff training.

Chair of the BCCC Sean Hughes said the follow-up review demonstrated the BCCC’s work had contributed to improvements across the industry.

“This follow-up reveals that most banks – but not all – have acted in response to the 2023 report. The majority appear to have taken the findings and recommendations seriously and implemented important changes,” Mr Hughes said.

“Managing a deceased estate can involve grief, financial pressure, uncertainty and unfamiliar legal or banking processes. When banks improve these processes, they reduce the risk of delays, confusion and unnecessary distress for representatives. They instil trust, which is core to their relationship with any customer.

“Banks need to ensure their processes are accurate, timely and easy to navigate. This is a matter of good customer service and central to meeting their commitments in the Banking Code of Practice.”

However, the BCCC’s follow-up review found that some banks continue to rely on manual processes, fragmented arrangements or underdeveloped monitoring and quality assurance. Three banks identified further work was required in key areas, including quality assurance frameworks, fee identification controls and staff training.

Mr Hughes said banks with unresolved weaknesses had been on notice for long enough and they should expect more formal and targeted engagement from the BCCC.

“These are not new issues, nor are they particularly complicated or expensive to repair,” Mr Hughes said.

“We made clear recommendations to the industry and gave banks ample time to review their practices. If gaps still remain, we may consider further investigation and formal action.

“Banks with deficiencies in their estate practices must address these as a priority. Every bank must be able to show that its processes for managing deceased estates work in practice. That means being able to identify relevant products, act within required timeframes, communicate clearly and compassionately, maintain effective records, and monitor whether the process is operating as intended.”

Following its 2023 inquiry, the BCCC undertook targeted investigations into three banks for non-compliance with Code commitments regarding deceased estates. All three banks were sanctioned for serious and systemic non-compliance, with ANZ and Bank of Queensland subject to naming sanctions.

The BCCC will continue to monitor management of deceased estates and may initiate targeted investigative activities into banks that fail to address weaknesses with their deceased estate management processes and practices.

Read the report.