The Australian Financial Complaints Authority (AFCA) has published its Systemic Issues Insights Report for the first half of the 2022-2023 financial year.
In the first half of the 2022-2023 financial year AFCA identified the most systemic issues in the banking sector, followed by general insurance, superannuation, investments and advice and then life insurance sectors.
Common systemic issues AFCA identified for each industry sector include:
- Banking and finance
- Transaction processing errorsErrors in credit reporting
- Credit errors including the incorrect provision of certain loans and inadequate controls in mobile banking
- General insurance
- Failures to give effect to AFCA determinations
- Policy interpretation including failures to properly implement an updated policy definition and adopting an unclear interpretation of policy wording
- Errors related to insurance in superannuation, including failures to comply with legislative requirements related to insurance for MySuper members and inappropriately allowing default insurance cover to lapse
- Investments and advice
- Breaches of the Corporations Act 2001, including incorrectly assessing clients suitability to trade in certain financial products and providing misleading information to customers
- Life insurance
- Incorrectly calculating premiums and over collecting premiums as a result
The report identifies a number of areas that AFCA considers financial firms should take note of including:
- Taking care in monitoring vulnerable customers;
- Ensuring adequate testing is conducted:
- Before installing system fixes;
- When businesses are sold and customers are transferred; and
- When new features and upgrades are implemented.
- Having robust controls and processes in place:
- Where systems between two companies connect;
- To monitor the conduct of authorised representatives or employees; and
- To ensure that team members are clear on key processes to avoid administrative oversights.
- Taking appropriate steps to holistically implement changes to policies and other key documents;
- Having mature processes in place to assess a client's risk profile and suitability to trade; and
- Keeping accurate client records and providing for efficient access to client records.
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