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The Australian Communications and Media Authority (ACMA) has recently been taking steps to ensure the telecommunications regulatory regime is ready for the full deployment of 5G.
As Australia moves towards a cashless society, bank system failures are having an increasing impact on customers and the economy.
Late last year, the Governor of the Reserve Bank of Australia (RBA), Philip Lowe, shone a light on the issue, warning the RBA was considering regulatory intervention if Australian banks and credit card providers did not tackle the increasing problem of system outages and upgrades during peak periods.
The RBA’s Payment System Board has now announced plans to put the threats into action. In a statement on 24 May, the Payment System Board endorsed a proposal to implement standardised banking system outage reporting. The framework aims to help regulators and consumers better compare service levels between banks.
Currently, reporting requirements allow banks to adopt their own duration, severity and impact categorisations, making it difficult for the RBA to understand the full scale of the issue. Banks also tend to skew figures in their own reporting and financial disclosures, giving shareholders and customers little transparency.
A national service level framework may make it easier for customers to claim compensation. Although banks tend to compensate customers for late fees and interest incurred as a result of a system failure, retail customers have been largely unable to claim compensation for overall business impacts. Standardised impact categorisations could help retail customers substantiate and claim business losses.
Standardisation also opens the door to the government setting minimum service level targets and imposing penalties for non-compliant banks.
Following the May announcement, Telcos and IT service providers can expect to see banks attempting to renegotiate service level agreements in an effort to bolster service levels and service credit entitlements. Banks may go as far as requiring compensation for regulatory penalties, customer claims and reputational damage flowing from system outages.
Written by Melissa Fai, Luke Standen and Hannah Bragge