The Council of Financial Regulators has published its advice to the Commonwealth Treasurer on potential policy responses to address de-banking as it specifically relates to financial technology firms, digital currency exchanges, and remittance providers.

The Council of Financial Regulators worked with AUSTRAC, the ACCC and the Department of Home Affairs to provide the advice.

De-banking occurs when a bank declines to offer a core banking service to or withdraws a core banking service from, a customer. Banking services in this context refers to transaction accounts and not the provision of more complex banking or credit products.

The CFR has proposed the following proposed package of policy measures to address some of the main frustrations experienced by the affected businesses:

1. Collect de-banking data – A data collection process would provide additional information into the extent and nature of the de-banking problem and inform any future policies;

2. Introduce transparency and fairness measures to address stakeholder concerns about banks’ processes in relation to the provision of core banking services;

3. Advise the major banks of the Government’s expectation that they provide guidance on their risk tolerance and requirements for the affected sectors;

4. Consider funding education on compliance processes of businesses in the affected sectors, particularly small enterprises.

If you found this article helpful, then subscribe to our news emails to keep up to date and look at our video courses for in-depth training. Use the search box at the top right of this page or the categories list on the right hand side of this page to check for other articles on the same or related matters.