ASIC has released its first publication of industry-wide data reported under the internal dispute resolution (IDR) data reporting framework.
Under the IDR framework, most licensed financial firms are required to report IDR data to ASIC on a six-monthly basis. This inaugural industry-wide report is a key milestone in the implementation of the framework. Publishing IDR data promotes transparency by sharing valuable information with consumers while also helping to drive improvements in IDR practices.
Key observations from the over 4.7 million complaints reported by financial firms of all types for the period 1 July 2023 to 30 June 2024 include:
- General insurance products were subject to the most complaints (33% of all complaints), followed by credit products (22%) and deposit-taking products (15%)
- most complaints were about service (45%), followed by charges (22%) and transactions (11%)
- most outcomes involved an explanation or apology only, or no remedy (43%), followed by a service-based remedy (39%) and a monetary remedy (13%)
- over three-quarters of all complaints were resolved within one day, and
- 623,555 complaints resulted in a monetary remedy, collectively totalling over $375 million.
While ASIC does not verify that financial firms' self-reported data accurately reflects their underlying complaints handling, we found variations in the volume of complaints reported by comparable firms and gaps in the IDR data that indicate the data reported to ASIC may not fully reflect the complaints received by some firms. As a result, ASIC is concerned that some firms are not reporting IDR data as accurately as is possible.
Moreover, 5,035 firms declared no complaints to report for the full year period. This number is higher than ASIC expected.
ASIC will assess compliance with the reporting requirements by reviewing firms that make a nil submission against other datasets, including reports of misconduct, reportable situations and data from the Australian Financial Complaints Authority (AFCA).
ASIC Commissioner Alan Kirkland said it is important for firms to foster a positive complaints management culture, including a focus on gathering accurate data, adding that firms should reflect on the detailed requirements and practical guidance outlined in ASIC's IDR data reporting handbook.
"The gaps we've identified suggest there may be inconsistent IDR reporting practices across the industry," said Commissioner Kirkland.
"While there may be reasonable explanations for some of these variances, we encourage firms to carefully review our report and guidance to assist in reporting complete and accurate IDR data. Starting from next year, we'll be publishing data about complaints received by individual firms. It is crucial that firms act now to address any gaps in IDR reporting processes, because we will publish the data as it is reported to us."
Commissioner Kirkland said ASIC is closely examining the standard of IDR reporting and undertaking a range of activities to strengthen compliance with the regime.
"Where we become aware of problems, we will engage with firms to understand the causes, and whether they stem from deficiencies in the firm's underlying IDR processes or in IDR data reporting," he said.
"Our ongoing analysis of the IDR data will also inform our other regulatory activities, so industry can expect to hear more from ASIC on this issue."
Ahead of publishing firm-level data, ASIC will consult on our approach to contextualising and presenting the data.
