Have licensees been clearing out their breach skeletons?
There has been a 50% increase in breach reporting since this time last year and this may represent the clearing out of skeletons from the closets of Australian Financial Services Licensees, according to the Australian Securities and Investments Commission (ASIC).
ASIC Commissioner, Sean Hughes revealed the statistic at a Banking and Financial Services Law Association conference saying that it had been revealed by the regulator’s Close and Continuing Monitoring program which had been reviewing breach reporting processes.
“One improvement has been an increase in the number of breach reports received,” he said. “We have seen an increase in breach reports by financial services licensees of over 50% compared to the previous year, and an increase of 99% compared to two years ago.”
“However, our observation is that the time taken to both identify and report breaches has not improved overall,” he said.
Hughes said that ASIC had also seen some slight improvement (though not universal) in time to remediate customers, noting that the “importance of fair and timely outcomes for consumers affected by institutions mistakes and breaches, cannot be understated”.
“We can speculate that the Royal Commission together with ASIC’s focus on the area, has led to a proverbial ‘clearing out the skeletons’, which has had an influence,” he said. “Whether these changes are only short-term remains to be seen, but ASIC’s focus on breach reporting is very much long term and will continue to be so.”
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