The association urges the roundtable to consider its suggested reforms, warning that Australia’s current credit reporting framework significantly lags behind international standards, and that expanding the system would drive economic efficiency, boost competition, and deliver better outcomes for consumers.

“Australia’s credit reporting system is outdated and limited compared to other developed nations,” said Elsa Markula, CEO of Arca. “Modernising credit reporting represents a significant opportunity to boost productivity through better data access and streamlined lending processes, yet we’re falling behind our international counterparts.”

Arca’s submission outlines three priority reforms that would bring Australia’s credit reporting system in line with global best practice:

Enhanced data inclusion: Adding more comprehensive data types to credit reporting, including balance information and richer repayment data, would improve lending decisions and support better consumer outcomes. Research shows 60% of consumers support easier and faster loan application processes.

Fraud prevention improvements: Replacing the current consumer ban system with more sophisticated fraud flag systems would better protect consumers whilst maintaining system efficiency.

Small business support: Exploring credit reporting for small and medium enterprises through a government-industry working group could significantly support the SME sector, which employs 7.4 million Australians and contributes $700 billion to the economy.

The submission strongly critiques the recent independent Review of Australia’s Credit Reporting Framework, arguing its recommendations would hamper economic resilience through rigid data minimisation and create unnecessary fiscal burden on taxpayers.

“If implemented, the independent review’s recommendations would miss critical opportunities for productivity gains,” Ms Markula said. “Rather than restricting credit reporting, we should be focusing on catching up to global standards and unlocking the economic benefits that come with a modern, comprehensive credit reporting framework.”

Arca emphasises that modernising credit reporting would benefit both industry and consumers by enabling more informed lending decisions and greater competition amongst lenders.

“These reforms aren’t just about improving efficiency for lenders – they’re about creating a system that works better for all Australians,” Ms Markula added. “A modernised credit reporting system would support financial inclusion, help consumers access credit on more competitive terms, and contribute to overall economic resilience.”

With the Economic Reform Roundtable commencing on 19 August, Arca is calling on the government to consider these industry-backed reforms as part of its broader productivity agenda.

Arca represents 95% of all consumer lending in Australia through its membership, including 14 of the nation’s largest banks, mutual banks, consumer finance companies, fintechs, and credit reporting bodies.

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Catherine Fitzpatrick

The industry association says there is an opportunity to uplift industry practice, and drive greater consistency in how financial institutions engage with individuals who suffer financial abuse.

Arca, the peak association focussed on the use of credit reporting and consumer data, has welcomed the Parliamentary Joint Committee on Corporations and Financial Services, and called for greater industry collaboration in addressing the issue.

Elsa Markula, Arca’s CEO, said: “Arca and our members recognise the devastating impact domestic abuse can have on an individual’s relationship with credit, and how their creditworthiness is seen through the lens of the credit reporting system. More must be done to assist victims and victim-survivors when they and their representatives interact with the credit reporting system.”

“We are strong supporters of the report from the Parliamentary Joint Committee, which is far reaching and hugely significant. There is an opportunity to uplift industry practice and drive greater consistency in how financial institutions respond to financial abuse, which will see improved outcomes for victims and victim survivors.”

Arca has undertaken an extensive consultation process over the last few years, which involved engaging with a range of specialists, including lived experience experts, financial counsellors, community legal services, and government organisations. As part of this, Arca engaged social enterprise, Flequity Ventures, who worked with research partners, Centre for Women’s Economic Safety, the Independent Collective of Survivors, and the Institute of Non-Violence, to conduct lived experience research.

The research, which involved surveys and interviews with victims and victim-survivors of domestic abuse, focussed on their experiences with credit products and interactions with credit providers. A roundtable on perpetrator perspectives was also conducted, along with subsequent workshops with Arca members to identify actions.

Based on insights from victims and victim-survivors of domestic abuse, Arca has identified a need for more consistency in how financial institutions engage with individuals who suffer abuse, alongside the flexibility to tailor responses to each individual’s situation. In response to the findings, the organisation is focusing on exploring industry-led initiatives to empower victims and victim-survivors.

Speaking about the project, Catherine Fitzpatrick, Founder & Director, Flequity Ventures said: “This research with victim-survivors was expertly facilitated within an ethical and trauma-informed framework by our project partners. It was complemented by insights from professionals who have between them more than 40 years experience working with men who use domestic abuse. This is an often overlooked part of the business response to domestic abuse, but it is an important input into consideration of customer service and accountability for perpetrators with safety at the heart.”

In response to the findings, Arca and its members have already undertaken to support victims and victim-survivors of domestic abuse, including advocacy for targeted regulatory relief and associated amendments to industry codes. Arca will be commencing broader stakeholder consultation in 2025.

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