bank mecu - responsible banking

bankmecu is part of a national framework for prudential regulation of Approved Deposit-Taking Institutions (ADIs) – including credit unions, building societies, banks and friendly societies – regulated by the Australian Prudential Regulatory Authority (APRA) and operates according to its Prudential Standards. bankmecu uses independent auditors, KPMG, to conduct an external audit of financial accounts. Audit findings are presented in a report to APRA. 

Other principal regulators are the Australian Securities and Investments Commission (ASIC), the Australian Competition and Consumer Commission (ACCC) and the Australian Taxation Office (ATO). 

bankmecu complies with all relevant legislation and codes that are in place to protect customers' money and personal information. All staff at bankmecu are responsible for compliance with policies, procedures, applicable laws and regulations. 

bankmecu has had no incidence of non-compliance with any law or regulatory code of conduct where the complaint was upheld, required reporting to ASIC or other authorities or resulted in court action. 

bankmecu did not receive any fines or sanctions for non-compliance with any laws and regulations relating to its business of banking. 

bankmecu continued to source all of its supplies in the Australian market through providers who demonstrate ongoing compliance with all relevant Australian laws and regulations. All new tender applications require providers to state any non-compliance. However, it is the onus of the provider to report any breaches as they occur.

Licensing

bankmecu is licensed under the Corporations Act 2001 (Cwth). Under the terms and conditions of the Australian Financial Services Licence (AFSL) (No 238431), bankmecu may deal in or advise on deposit and payment products and general insurance products.

Customer privacy

bankmecu has privacy policies consistent with the Privacy Act 1988 (Cwth) and the National Privacy Principles, which provide a clear and concise outline of how and when personal information is collected, stored and distributed by bankmecu.

A Privacy Officer is designated to review complaints concerning possible breaches of privacy relating to the personal information held by bankmecu in respect of a customer. If the complainant is not satisfied with the outcome of the review, the customer can refer their complaint to The Office of the Federal Privacy Commissioner. 

In 2010/11 a member received a statement not intended for them as a result of staff error when a new account was incorrectly linked to another member who had also opened an account on the same day.

There were no matters referred to the Privacy Commissioner during 2010/11.

Anti-money laundering

bankmecu complies with Anti-Money Laundering (AML) requirements. On commencing employment, personal banking staff members are trained on how to detect and deal with suspect transactions and they receive annual refresher training.

Anti-bribery and corruption

bankmecu complies with the Australian Standards AS 8001-2003 Fraud and Corruption Control and AS 8004-2003 Whistleblower Protection Programs for Entities.

bankmecu’s Staff Charter contains a section pertaining to gifts and benefits, and states that each employee agrees not to engage in any act that could be interpreted as ‘seeking or receiving a bribe, kickback or questionable payment’.

bankmecu’s Counselling and Performance Policy manages issues any with staff who attempt to mislead or behave dishonestly. Serious misconduct, should it occur, may result in instant termination of employment. No misconduct was identified during the year.

A Whistleblowing Procedure available to staff outlines the steps they might follow in the event they become aware of improper conduct.

Internal fraud and corruption risks are assessed as part of the annual risk review.

All business units assessed their risks related to corruption this year.

Card fraud

Card fraud continues to be the main source of corrupt practice that has impacted on Company activities. Criminals have increased their targeting of the Australian market while Australia is catching up on the card security enhancements earlier implemented in Europe.

Card Not Present Fraud purchases (telephone and internet) were again the most common form of card fraud during 2010/11. These figures reduced in the second half of the financial year due to the introduction of Verified by Visa (VbV), which is part of Visa International’s 7 point security plan.

Counterfeit cards accounted for the highest losses in 2010/2011. Worldwide Australia has seen greater counterfeit losses than US and Europe, with overseas criminals targeting Australia’s ATM and Point of Sale (POS) machines. This is evident by the number of skimming devices and hacking attempts made on Australian merchant terminals and ATMs. Larger-scale compromise on popular merchants prompted greater media interest and coverage.

Card protection enhancements introduced during the year include implementation of the EMV (Europay, MasterCard and VISA) standard incorporating chips on cards and moving to the use of PINs for transaction authorisation. The Banking Integrity team work to minimise the loss to bankmecu and its customers from the monitoring and recovery of card transactions. The team actively monitors card trends and incorporates this knowledge into bankmecu’s card based fraud monitoring system. Card monitoring is also active outside business hours.

bankmecu continues to provide training and guidelines to staff and members on fraud awareness. bankmecu participates in public awareness campaigns which further educate customer fraud awareness.

bankmecu staff have taken part in various fraud awareness campaigns, with templates provided by Cuscal for use on bankmecu’s website to educate staff and customers around key fraud related issues.

Abacus developed internal and external fraud training modules which are used by bankmecu staff , they also play an advocacy role on behalf of the mutual financial services sector.

bankmecu continues to look at further enhancements to fraud monitoring with a focus on customer communication.

Figure 3a: Card Fraud