Westpac named and shamed for ‘serious and systemic’ code breach

The Banking Code Compliance Committee (BCCC) has sanctioned Westpac for its alleged mishandling of a regional branch closure in 2022.

According to the BCCC, which monitors Australian banks’ compliance with the 2019 Banking Code of Practice, the big four bank failed to provide adequate support to customers after the closure of its Tennant Creek branch in regional Northern Territory in September 2022 – in breach of its obligations under the Banking Code and the Australian Banking Association’s (ABA) Branch Closure Protocol.

“The findings show that Westpac needed to do much more to support customers to transition to other ways of banking, engage with the community to promptly address concerns, and provide adequate assistance to customers in remote areas to ensure they could still access essential banking services,” the BCCC wrote in a statement.

The BCCC stated in its post-outcome statement that a significant number of customers of the Tennant Creek branch struggled to adapt to the closure, leading to an influx of requests to local community groups for help.

Westpac’s response to concerns raised by the community groups was deemed insufficient by the BCCC, creating, it said, “further challenges, particularly for vulnerable customers, such as the elderly or those for whom English is not a first language”.

Upon closure of the branch, the BCCC found that Westpac also failed to provide options for alternative banking services, as required in paragraph 36 of the Code.

Westpac’s communication strategy was also deemed a failure, with the bank only providing detailed information about transition and support arrangements to customers in a letter “21 days after the branch closed”.

According to the BCCC, while Westpac had explained that it acted out of concern for its staff safety when closing the branch, it found “significant and protracted failures to support customers and respond to community concerns”.

“This delay was unacceptable given the branch was closed with no notice, leaving customers unprepared to transition to other ways of banking,” the BCCC wrote.

BCCC chair Ian Govey claimed Westpac’s actions had a “significant and detrimental impact on many people within the Tennant Creek community”.

“Westpac’s failure to respond promptly to community concerns and provide adequate support was troubling and appears to have disproportionately impacted on vulnerable customers.”

Govey concluded: “This decision sends a clear message to the banking industry that non-compliance with the Code’s standards will not be tolerated. Banks must carefully consider the needs of [their] customers and provide the right support to adapt to new ways of banking.”

Westpac in May this year announced a full moratorium on regional branch closures until at least 2027, overruling a commitment earlier in the year to prevent the closures of just eight regional bank branches.