There are new and enforceable requirements when it comes to Internal Dispute Resolution (IDR) for the financial services industry.
The Australian Securities and Investments Commission (ASIC) has introduced some changes in their newest Regulatory Guide and financial firms have until the 5th of October 2021 to follow suit.
RG 271 and its corresponding legislative instrument are intended to improve complaints handling in the industry so that outcomes are fair and timely, with a stronger emphasis on addressing systemic issues.
To make it even more official, there are specific requirements outlined in the guide that firms are legally obliged to follow.
In order to break down exactly what businesses in this industry are required to do to comply with these upcoming changes, we look at the four clauses that the finance sector should pay the most attention to...
The Definition of A Complaint
To begin with, RG 271 broadens the definition of a complaint to:
“[An expression] of dissatisfaction made to or about an organisation, related to its products, services, staff or the handling of a complaint, where a response or resolution is explicitly or implicitly expected or legally required.”
They go on to specify that this includes dissatisfaction expressed on a business’s social media page, as well as general dissatisfaction of the existing remediation process.
In practice, this means that financial institutions will need to look closer at the social media accounts they control and monitor them for any incoming complaints. These should be taken just as seriously as those that come through the official channels.
Systemic Issue Management
The management of systemic issues is a particularly prominent change that the guide and also one of RG 271’s enforceable paragraphs.
ASIC defines a systemic issue as ‘a matter that affects, or has the potential to affect, more than one consumer’.
To comply with the new requirements, these businesses must:
- Set clear accountability for complaints handling functions
- Encourage and enable staff to escalate any possible systemic issues they encounter in individual complaints
- Consistently analyse complaint data sets to identify systemic issues
- Promptly escalate possible systemic issues to appropriate areas within the firm for investigation and action
- Report internally on the outcome of investigations, including actions taken, in a timely manner
These obligations have been put in place to identify and fix systemic issues early and prevent these matters being raised to external bodies, like the Australian Financial Complaints Authority (AFCA).
ASIC also suggests that financial firms take action to identify any previous customers that may have been affected by these issues.
Mandatory Data Reporting To ASIC
It has been indicated that data reporting to ASIC will also soon be mandatory, although these changes will not come into effect on the 5th of October.
However, businesses should start thinking about how to prepare for these upcoming changes now.
Considering that resourcing is an enforceable aspect of RG 271, companies in the financial services industry will need to ensure there is adequate staffing, training and authority in the IDR process.
This is designed to improve the experience for the customer and assist with the requirement to provide a written IDR response to the complainant. When it comes to it, this extra resourcing will be vital to ensuring that the mandatory data reporting to ASIC is complied with as well.
Feel Overwhelmed?
It can be difficult to Know If You Are RG 271 Compliant considering all the changes that are coming into effect.
At Causia®, we know that these changes are going to be difficult to get on top of, which is why we’ve designed our industry-specific complaints and compliance software.
As Complaints Pro® is an Australian-made software, we have in-built features that comply with Australian industry standards. The advantages include:
- Ability to quickly locate and analyse root causes and systemic issues
- An easy-to-use, intuitive and integrated interface for quick and simple resolutions
- ASIC IDR response and delay notification templates
- ASIC mandatory reporting with automatic extraction into ASIC upload ready CSV
With Complaints Pro®, you’ll be ahead of the game compliant with our out of the box solution.
Get in contact with the team at Causia® or book a demo today!
