Financial services need to improve their Internal Dispute Resolution (IDR).
The Australian Securities and Investments Commission (ASIC) cited structural issues, a lack of transparency, and poor customer service.
This relates to some research results released about the IDR process, in which the conduct regulator indicated a desire to raise standards concerning the processes and procedures around internal complaints.
The announcement comes just a weeks after the new external dispute resolution body, the Australian Financial Complaints Authority (AFCA), released numbers on the high volume of complaints received since opening its doors.
All this follows the ‘wrap on the knuckles’ organisations received during the Royal Commission for slow remediation processes in general.
Onsite reviews into IDR
The regulator has commenced their onsite reviews of the big four banks and AMP as part of their Continuous Monitoring Program, during which they will be monitoring IDR arrangements.
“Making a complaint can be a stressful exercise for many people, and there are clear opportunities for financial services firms to improve consumer experience and outcomes,” ASIC Commissioner Danielle Press said, in the ASIC release earlier this week.
ASIC found that, out of the 17 per cent of Australian adults who have considered making a compliant in the past year, only 8 per cent chose to make that complaint. More than half did not believe their complaint would make any difference, and 18 per cent dropped their complaints altogether.
The regulator found 45 per cent had ‘unfavourable outcomes’, based on their complaint received and the explanation given. Only 21 per cent of those complaints that fell outside of the IDR timeframe were given any explanation about the process.
ASIC indicated that public consultation will be sought on the IDR guidance Regulatory Guide 165 Licensing: Internal and External Dispute Resolution, which will include a review of definitions, requirements, timeframes and reasons for the complaints by superannuation trustees.