Regulator Slams Australia Banks for Delays in Reporting Breaches
(Bloomberg) -- Australia’s securities regulator said it’s considering penalizing the nation’s banks for “unacceptable delays” in reporting significant breaches of the law, in yet another blow to the scandal-plagued industry.
Financial institutions are taking on average more than 4 1/2 years to identify problems that can range from failing to meet lending standards to fraud, the Australian Securities & Investments Commission said in a report Tuesday.
Major banks are typically taking 150 days from starting an investigation to reporting a breach, according to the regulator. One in seven significant breaches identified by the banks fails to meet the 10-day reporting deadline.
The issue has been repeatedly raised at a wide-ranging inquiry into Australia’s financial system that’s exposed a litany of bad behavior, from lying to regulators to giving misleading financial advice. The so-called Royal Commission is due to hand down its interim report to the government by the end of this month.
“Breach reporting is a cornerstone of Australia’s financial services regulatory structure,” ASIC Chairman James Shipton said in a statement. The delays and the time taken to compensate customers “is a sad indictment on the financial services industry.”
The regulator said it is “actively considering enforcement action for failures to report breaches on time.”
“There is an urgent need for investment by financial services institutions in systems and processes as well as commitment and oversight from boards and senior executives to address these significant failings,” Shipton said.
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