New guideline expands safeguards for small business loans and third parties
The Australian Banking Association (ABA) has released an updated industry guideline aimed at helping banks better detect, prevent, and respond to financial abuse, consolidating previously separate resources covering elder abuse and family and domestic violence into a single framework.
Financial abuse can take many forms: the ABA describes it as including spending money without permission, denying someone access to their own accounts or statements, or pressuring a person to go guarantor on a loan or sign over financial assets.
Against that backdrop, the guideline builds on existing industry practice and supports the financial abuse provisions already set out in the Banking Code of Practice.
Third-party and lending safeguards tightened
The guideline updates expectations around managing third-party authorities, with stronger protections in place where there's a risk of abuse. It also recognises small business lending as a potential channel for financial abuse, introducing safeguards designed to test whether a loan genuinely benefits the borrower – relevant wherever loan structuring or guarantor arrangements intersect with family or business relationships.
Broader scope for vulnerable customers
The update also expands support for customers experiencing vulnerability more generally, including guidance on how financial abuse can present within First Nations communities. It sharpens the focus on product and service design too, with an emphasis on safety-by-design principles, staff training, and clearer pathways for customers to disclose abuse.
ABA says banks won't tolerate misuse of products
ABA chief executive Simon Birmingham (pictured) said the update was about ensuring banks maintain the strongest possible safeguards for customers at risk.
"Banks will never accept their products being used to control or coerce someone," Birmingham said in a media release.
This builds on more than ten years of industry work on the issue, banks say, with frontline staff regularly helping customers regain control of their finances. The guideline sets an expectation that customers shouldn't have to repeat their situation to multiple staff, and can agree a safe, consistent way to stay in contact going forward.
