Ahead of the October deadline for new data reporting standards for internal dispute resolution (IDR), ASIC has released key documents, including a pilot version of a ‘data dictionary’, to help financial firms comply with the new regulations.
The new data dictionary spells out the necessary data to be collected by financial organisations and reported to ASIC as part of the new Internal dispute resolution (RG 271) standard.
ASIC has also provided a supplementary data glossary to provide further explanations of key terms found in the dictionary.
Regulated entities must comply with RG 271 from 5 October 2021, with the corporate watchdog advising FSIs to map their own complaints systems to the data dictionary.
The pilot releases of the data dictionary and glossary, which could see further amendments before the October deadline, have come after two rounds of public consultation.
ASIC said the latest dictionary and glossary releases have been “substantially simplified” since the two consultation rounds.
The documents are said to “align as closely as possible with the reporting approach of the Australian Financial Complaints Authority [AFCA]”. This, the regulator added, will allow it to “develop an end-to-end picture of financial system complaints”.
The dictionary provides clarity and clear-cut standards for mandatory data reporting fields, including ‘complainant type’ (i.e. who made the complaint), as well as conditional fields, including gender and age of complainants, and optional fields, including number of days to resolve a complaint.
IDR data reporting, ASIC notes, is intended to improve transparency in the IDR system, assist consumer decision-making, and allow firms to benchmark themselves against their peers.
It is also expected to be used for identifying emerging issues, ASIC said.
The new IDR data reporting framework comes off the back of the 2017 Ramsay Review, officially known as the Review of the financial system external dispute resolution and complaints framework, which delivered the Australian Government’s first comprehensive assessment of the financial industry’s external dispute resolution framework.
ASIC’s IDR rules require financial firms to have in-house process to resolve complaints received about their products and services, including how they handle complaints.
The Report found that data on internal dispute resolution activities remained limited, with “no comprehensive, consistent, comparable, publicly available IDR data”.
In a bid to improve transparency in dispute reporting, the review recommended a “standardisation” of mandatory reporting of IDR activity to ASIC, including outcomes for consumers in relation to complaints raised at IDR. Recommendations were also made to allow ASIC to publish the data.
Australians lodged more than 70,000 complaints with the Australian Financial Complaints Authority (AFCA) over the past 12 months.
While complaints, overall, fell 12 per cent on 2019-20 figures, owing in large part of the spike in travel insurance complaints at the height of the initial Covid lockdowns, complaints related to personal transaction accounts surged 48 per cent over the 2020-21 period; unauthorised transactions accounted for nearly one-third of those complaints.
Complaints related to electronic banking also increased 76 per cent, with unauthorised transactions accounting for 28 per cent of those complaints and mistaken internet payments representing a further 19 per cent.
ASIC notes that the existing Regulatory Guide 165 Licensing: Internal and external dispute resolution (RG 165) will continue to apply to all complaints received before 5 October 2021.