Big banks, superannuation funds and other financial services companies will be named and shamed by the Australian Financial Complaints Authority (AFCA) under new rules approved by the corporate regulator on Monday.
The Australian Securities and Investment Commission (ASIC) has decided to approve rule changes to allow the financial complaints body to publicise the names of firms when publishing dispute determinations.
The decision will boost transparency in the scandal-plagued banking sector and increase public pressure on financial services companies.
AFCA, launched last year amid the banking royal commission as a ‘one-stop-shop’ for financial complaints, received over 35,000 complaints in its first six months, almost 5,000 of which are slated to be finalised by determination each year.
More than 2,100 businesses have made complaints since AFCA opened amid efforts to encourage firms affected by banking misconduct to apply for compensation.
Determinations are already made public under existing rules, but the reform will see the names of firms now included in those disclosures, in what ASIC said will help identify bigger issues.
“Naming firms in determinations can help identify conduct or market problems within firms or affecting specific products or services, as well as highlighting where firms have done the right thing,” the regulator said in a statement circulated Monday.
“It will also enhance transparency and accountability of firms’ performance in complaints handling and of AFCA’s own decision-making.”
AFCA chief David Locke, who ran a consultation on the proposal in May, said the decision would benefit transparency.
“This is an important change, and the public will now be able to access increased information about the actions of financial firms.”
A start date for the naming of financial firms has yet to be finalised and is subject to ongoing discussions between AFCA and ASIC.