The Australian Securities and Investments Commission has updated regulatory guidance in a bid to help financial firms remediate their customers quickly and effectively.
The corporate regulator on Tuesday revealed it had overseen at least $5.6 billion in remediation for about seven million customers over the past six years for failures identified in the financial system.
Around $1.6b is yet to be paid to an estimated 2.7 million Australian customers.
ASIC deputy chair Karen Chester said the guidance put the onus on the industry, saying the watchdog “cannot and should not” oversee remediation programs.
“To date ASIC has needed to oversee large scale remediations to ensure affected consumers were treated fairly and received the compensation they were entitled to,” she said.
“Licensees must also do better at identifying and remediating problems earlier to avoid the costly lag and drag of remediation.”
The updated guidance outlines licensees’ legal obligations to operate efficiently, honestly and fairly, with ASIC saying it had responded to industry requests for advice and clear guidance on remediations.
ASIC said as of June this year, it was monitoring 36 remediation activities across superannuation, advice, credit and banking, and insurance.