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.

———-

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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Mr Sean Hughes is currently General Counsel for Vanguard Investments Australia and brings deep expertise in financial services regulation, law, corporate governance and risk oversight.

Mr Hughes served as a Commissioner at ASIC from 2018 to 2023, where he played a key role in implementing the recommendations of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry.

During his time at ASIC, he also led regulatory oversight of a number of sectors, including banking, credit and payment systems, and ASIC’s response to COVID-related hardship measures for bank customers.

Prior to ASIC, Mr Hughes held senior leadership roles including Group General Counsel at Tabcorp, Chief Risk and Legal Officer at UniSuper, and Chief Executive Officer of New Zealand’s Financial Markets Authority.

As Chair, Mr Hughes will oversee the Committee’s monitoring of Code compliance, commencing a three-year term in early 2026, taking over from outgoing Chair Mr Ian Govey AM.

“Sean brings extensive experience to this role and will be a huge asset to the committee as it continues its work promoting compliance with the code, and by doing so, creating fairer outcomes for consumers,” said AFCA Chief Ombudsman and Chief Executive Officer David Locke.

“I would like to thank outgoing Chair Ian Govey AM for his service and guidance over the past six years. Ian has made a significant contribution strengthening the committee’s oversight of the code and improving outcomes for consumers,” said Mr Locke.

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ASIC Chair Joe Longo said ‘We are grateful for the contribution Sean has made to ASIC in his role as Commissioner and wish him well in the next stage of his career.’

Mr Hughes was due to end his five-year term on 1 December 2023. The appointment of an ASIC commissioner is determined by the Treasurer.

ASIC’s Commission will continue to work via a whole-of-ASIC approach, with current members Chair Longo, Deputy Chairs Sarah Court and Karen Chester, and Commissioner Danielle Press, working with the Chief Operating Officer and the Executive Team.

Background

Mr Hughes has had previous senior positions with ASIC, including from 2008-2010 as Senior Executive Leader for Corporate Governance and Corporations. From 1999-2003, he held a number of senior executive roles including as Director, Financial Services Regulation.

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ASIC considers ‘greenwashing’ as the practice of misrepresenting the extent to which a financial product or investment strategy is environmentally friendly, sustainable or ethical.

ASIC undertook a ‘greenwashing’ review of a sample of superannuation and investment products and identified some areas for improvement. In particular, issuers in their disclosure and promotions need to:

• use clear labels
• define the sustainability terminology they use
• clearly explain how sustainability considerations are factored into their investment strategy.

ASIC Deputy Chair Karen Chester said, ‘Managed funds and super funds are responding to the increasing investor demand for sustainability-focused investments. Investors are not only motivated by their values here, but also by long-term financial returns.

‘Transparency and trust are paramount as the market for these products continues to develop and grow. In our region alone, sustainability-labelled investments have more than doubled between 2019 and 2021. While globally, ESG assets are projected to exceed US$53 trillion by 2025 and represent more than a third of total assets under management.

‘Our information sheet is simply about helping issuers comply with their existing regulatory obligations. Labels or headline statements about a product’s green credentials should not be misleading. Being ‘true to label’ is not a nice-to-have, it’s a regulatory must-have. It’s also a must-have for investor confidence and trust. And a must-have for both fair and efficient market outcomes here. Misdirected investment here will inevitably be at great economic cost.

‘We have set out 9 important questions for issuers to ask themselves. We would hope and indeed expect issuers to review their practices against our information sheet,’ Ms Chester said.

ASIC Commissioner Sean Hughes added, ‘This is and will remain a priority area of focus. ASIC is continuing to monitor the market and will be looking for misleading claims about ESG and sustainability.

‘We are also appealing to industry and investors to alert us if you see suspected greenwashing in financial products.’

ASIC has also published new information to help investors assess if their values and goals align with a sustainability-related or ESG product.^[1]

Commissioner Sean Hughes said, ‘In weighing up investment options that suit their values, we encourage consumers to look out for vague or ambiguous language or exaggerated marketing claims that lack a reasonable basis to support them.’

‘This is clearly an evolving area, which is attracting attention from investors, funds and policy-makers alike. ASIC will continue to monitor sustainability disclosure practices and will make changes to INFO 271 to ensure our information remains relevant, contemporaneous and useful.’

Download

Information Sheet 271: How to avoid greenwashing when offering or promoting sustainability-related products^[2]

Background

ASIC regulates the way financial products are sold and distributed and the conduct of issuers offering financial services. Existing regulatory guidance sets out how issuers should meet their related obligations:

Regulatory Guide 65^[3] sets out ASIC’s guidelines on how product issuers can meet their obligations under the PDS requirements to disclose how labour standards or environmental, social or ethical considerations are taken into account in investment decision making.

Regulatory Guide 234^[4] contains good practice guidance when advertising financial products and services.

Regulatory Guide 168^[5] gives policy guidance on preparing a PDS that complies with the PDS requirements.

In the 2020-21 Corporate Plan, ASIC indicated it would undertake a review to assess whether product issuers were engaging in ‘greenwashing’ that results in consumer harms.

Issuers means responsible entities of managed funds, corporate directors of corporate collective investment vehicles (CCIVs), and trustees of registrable superannuation entities.

ASIC is also engaged with international developments in this field and supports^[6] the International Sustainability Standards Board giving priority to a standard on climate-related disclosures.

———

[1] https://moneysmart.gov.au/how-to-invest/environmental-social-governance-ESG-investing
[2] https://asic.gov.au/regulatory-resources/financial-services/how-to-avoid-greenwashing-when-offering-or-promoting-sustainability-related-products/
[3] https://asic.gov.au/regulatory-resources/find-a-document/regulatory-guides/rg-65-section-1013da-disclosure-guidelines/
[4] https://asic.gov.au/regulatory-resources/find-a-document/regulatory-guides/rg-234-advertising-financial-products-and-services-including-credit-good-practice-guidance/
[5] https://asic.gov.au/regulatory-resources/find-a-document/regulatory-guides/rg-168-disclosure-product-disclosure-statements-and-other-disclosure-obligations/
[6] https://asic.gov.au/about-asic/news-centre/find-a-media-release/2021-releases/21-349mr-asic-welcomes-new-international-sustainability-standards-board-and-updated-climate-related-disclosure-guidance/

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ASIC surveyed 3,000 Australians aged 15 to 21, to better understand the money challenges young Australians face. The results provided insight into how young people learn about and engage with money, and how they feel about their finances.

To support young people make money choices that work for them, and to recognise Global Money Week (21-27 March), ASIC has released Get Moneysmart. This new resource is designed to make it easier for young people to manage their money and deepen their understanding of key money concepts and behaviours.

‘Many young Australians are active consumers with multifaceted financial lives. They are handling money, setting savings goals, shopping online, using debit cards and making payments with their phones.

‘As they move into their final years of school, they are making decisions around pursuing further education, employment, and moving out of home’, said ASIC Commissioner Sean Hughes.

ASIC convened an Expert Group on the financial wellbeing of young Australians and established a number of working groups that included educators, parents, academics, industry, and importantly young people (see 20-110MR). This activity contributed to ASIC’s ongoing research and effort to support young people, and informed ASIC’s young people and money report released in December 2021.

Dr Phil Lambert, Chair, ASIC’s Expert group confirms the importance of this work: ‘It is hard to fathom why such a fundamental life competency as managing money is left to chance, rarely discussed in a young person’s life journey and where responsibility is shared by many but rests heavily on the individual to stride confidently, tread cautiously or wander aimlessly along the way.’

The work of the Expert Group, along with the findings of ASIC’s young people and money surveys, have provided a greater understanding of the context young people make financial decisions in. It has also highlighted the importance of financial firsts and the role of timely consumer education. These insights have informed the development of the new Moneysmart resource, ‘Get Moneysmart’.

Get Moneysmart is a suite of videos, tools and calculators to help young people with everyday money decisions. It offers practical tips to help them make informed money decisions, manage an income, track their spending and plan for the future.

‘Get Moneysmart encourages young people to make a money plan and feel more in control of their financial lives.

‘Learning early how to manage money, make informed choices, save and plan for the future, helps young people be more prepared for significant financial decisions later in life, as well as guard against common pitfalls and unnecessary risks’, Commissioner Hughes concluded.

Key findings from the survey include:

Background

ASIC’s Moneysmart resources support the Agency’s consumer education responsibilities. Moneysmart promotes confident and informed participation by investors and consumers in the Australian financial system and is aligned to ASIC’s regulatory mission to help Australians to be in control of their financial lives.

Every day around 40,000 Australians visit ASIC’s Moneysmart website – Moneysmart is recognised as a trusted source of information for consumers and investors and a starting point for the many financial decisions people make every day.

Global Money Week is an annual global awareness-raising campaign lead by the OECD International Network on Financial Education (OECD/INFE). The theme for 2022 is “Build your future, be smart about money” and focuses on the importance of ensuring young people, from an early age, are financially aware, and are acquiring the knowledge, skills, attitudes and behaviours necessary to make sound financial decisions and ultimately achieve financial well-being and financial resilience. The global campaign will run from 21-27 March 2022.

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ASIC took on the case against Westpac because we felt it was important for judicial clarification of a cornerstone legal obligation on lenders. The Credit Act imposes a number of legal obligations on credit providers, including the need to make reasonable inquiries about a borrower’s financial circumstances and capacity to service a loan. Credit providers must also verify the information obtained from borrowers and make an assessment of whether a loan is not unsuitable for the borrower.

On 1 March 2017, ASIC commenced Federal Court proceedings alleging that, during the period between December 2011 and March 2015, Westpac failed to properly assess whether borrowers could meet their repayment obligations before entering into home loan contracts (17‑048MR).

On 13 August 2019, the Federal Court found Westpac had not breached the responsible lending provisions of the Credit Act, as Perram J decided that a lender ‘may do what it wants in the assessment process’ (19‑210MR).

‘ASIC notes today’s majority judgment and will review each of the separate decisions carefully – including what additional measures or clarification may be required to support compliance with the Credit Act,’ said ASIC Commissioner Sean Hughes.

Background

In 2019, ASIC undertook a consultation process to update its responsible lending guidance (19‑342MR). As is ASIC’s usual practice, we will carefully consider the Court’s determination and any revisions that are necessary to our guidance.

• Read the full judgment

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The new obligations were legislated by the Parliament in response to Recommendation 1.2 of the Financial Services Royal Commission. From 1 January 2021, mortgage brokers will be required to act in the best interests of consumers and to prioritise consumers’ interests when providing credit assistance.

Consistent with this legislation, the guidance is high level and principles-based, but also incorporates practical worked examples. The purpose of the guidance is to explain the obligations introduced by the Government – it does not prescribe minimum standards of conduct, nor does it impose new or additional obligations.

Regulatory Guide 273 Mortgage brokers: Best interests duty (RG 273) contains ASIC’s views on how mortgage brokers may comply with their best interests obligations at key stages of the credit assistance process. It provides guidance on:

• the effect of the range of credit providers and products brokers can access
• recommending packages of credit products
• the types of records that may be kept to demonstrate compliance.

Announcing the new guidance, ASIC Commissioner Sean Hughes said, ‘These are important and timely reforms for the mortgage broking industry and for customers shopping for a loan. This reform was legislated by the Parliament to improve the quality of credit assistance provided to consumers. ASIC supports that objective.

‘Consumers rightly expect mortgage brokers to act in their best interests and ASIC’s guidance describes how we expect them to do so. Under these new obligations, let there be no doubt – the consumer must always come first.

‘We released this regulatory guide as early as effectively possible, to help industry prepare on a timely basis for the best interests duty and related obligations before January 2021.’

From 1 January 2021, ASIC will closely monitor conduct and outcomes to ensure mortgage brokers are complying effectively with the best interests duty.

Alongside the new guidance, ASIC has also published a report responding to feedback received during the consultation process (REP 662).

Download

• Regulatory Guide 273 Mortgage brokers: Best interests duty
• Report 662 Response to submissions on Consultation Paper 327 Implementing the Royal Commission recommendations: Mortgage brokers and the best interests duty (CP 327)
• Submissions to CP 327

Background

In February 2019, the Parliament passed the Financial Sector Reform (Hayne Royal Commission Response—Protecting Consumers (2019 Measures) Act 2020, which introduced a best interests duty for mortgage brokers in response to Recommendation 1.2 of the Royal Commission. The duty is a statement of principle which seeks to align the interests of the mortgage broker with the interests and expectations of the consumer.

ASIC’s guidance will help mortgage brokers to comply with these legal obligations by setting out ASIC’s views on what the best interests duty provisions require and suggest the steps that can minimise the risk of non-compliance.

The guidance is structured around the key steps common to the credit assistance process of brokers, such as gathering information, individually assessing products, and presenting information and recommendations to the consumer.

The obligations were initially due to commence on 1 July 2019, but ASIC has provided a temporary exemption for six months in light of the effect of COVID-19 on the financial system.

ASIC consulted on draft guidance (CP 327) in February/March 2020. The submissions received in response to CP 327 helped to inform ASIC’s final guidance in Regulatory Guide 273. ASIC has published a feedback report, in response to the submissions received on CP 327, which outlines the changes made to the draft guidance and addresses stakeholder feedback.

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