ASIC has approved a new Australian Banking Code of Practice, designed to strengthen consumer protections.

The Australian Banking Association (ABA) has announced ASIC’s approval of a new Banking Code of Practice, set to take effect on 28 February 2025.

Former Queensland Premier Anna Bligh, CEO of the ABA, says the updated Code will ensure higher standards of customer service. 

“Banks are focused on delivering the highest standards of customer service to all Australians, and the Code is a fundamental part of ensuring this happens,” she said. 

“This updated rule book for banks raises the bar even higher with enhanced protections for customers. It will ultimately drive even better outcomes for customers.”

The revised Code, described by Bligh as a “Banking Code with teeth”, provides consumers with rights and protections that go beyond existing legal requirements. 

It ensures that customers can address grievances through the Australian Financial Complaints Authority or the courts, with the Banking Code Compliance Committee continuing to monitor adherence to the Code.

The new Code introduces several key changes, including a broader definition of a small business to include those with aggregate borrowings up to $5 million, extending protections to an additional 10,000 small businesses.

Banks will also be required to meet with potential guarantors to ensure they understand their The Code introduces a new definition and specific provisions for supporting vulnerable customers, as well as new guidelines for managing deceased estates, ensuring a sensitive and structured approach.

Banks will also be required to organise or refer customers to free support services, including interpreters, AUSLAN, and National Relay Services.

The updated Code emphasises inclusivity, recognising the need for banking services to cater to diverse sexual orientations and gender identities.

Bligh highlighted the regulatory context within which the Code was updated, noting that since the last revision in 2019, an additional 1,175 pages of legislation and regulation have been introduced. 

“We have taken the opportunity to remove some provisions that are now covered by legislation. This strikes the right balance between creating new protections and simplifying the Code to ensure it is easier to understand and apply - not only for bank staff but for customers and their representatives too,” she said.

ASIC's approval of the revised Code follows an independent review in 2021 and public consultations from November 2023 to January 2024. 

“Banks have a significant impact on our lives, and Australians and ASIC rightly have high expectations of them,” ASIC Chair Joe Longo said.  

“ASIC’s review has been focused on ensuring this Code can make a difference in the day-to-day practice of the banking sector and through that, good customer outcomes.”

ASIC plans to release additional reports on topics such as Better Banking for Indigenous Australians, credit card offerings, and scam detection, prevention, and response. 

“The Code and reports like these are a call for banks to continuously look at how they should be putting the customer front and centre,” Longo said. 

The ABA has committed to updating the Banking Code Compliance Committee Charter, with both the revised Code and the updated Charter to be effective from 28 February 2025. These documents will soon be available on the ABA and BCCC websites.