The Banking Code Compliance Committee (BCCC) has published its report on the follow-up inquiry into the progress that the 17 Code-subscribing banks had made in implementing its recommendations and improving practices to meet their guarantee obligations: 2023 Guarantees Follow-Up Report. Background.

The Follow Up Report examines the improvements that banks have made since the BCCC published its 2021 Guarantees Report, which made 23 recommendations for improved practice regarding
obligations for guarantees.

The Follow-Up Report concludes that banks made meaningful changes in the following areas: better support for vulnerable guarantors, enhanced training to raise staff awareness of Code standards, and
newly introduced or strengthened interviews with prospective guarantors.

The follow-up inquiry also found areas for improvement:
• Some banks had few or no controls in place to ensure the improvements they implemented were achieving the desired results.
• For others, improvements and controls were not implemented consistently across business units or subsidiary brands.
• Several banks did not demonstrate appropriate governance over third parties, such as panel solicitors or brokers, who undertook parts of the guarantee process for the bank.

The BCCC also found a lack of progress on three recommendations from its 2021 Guarantees Report:
• Some banks still do not require their staff or brokers to conduct interviews with prospective guarantors to ensure they are fully informed before entering into a guarantee.
• Some banks had not audited their compliance with the Code’s guarantee obligations to evaluate their performance against these obligations and identify areas of risk to address.
• Most banks do not utilise guarantee-related data to proactively identify issues and make continuous improvements to their guarantee process.

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