REGIONAL REVIEW
Banks do have obligations when it comes to financial hardship . Under section 72 of the National Credit Code , if a customer says they ’ re unable to meet their credit obligations , lenders have to consider varying the customer ’ s credit contract and advise them of the decision within specified timeframes . According to the ASIC lenders are also supposed to proactively communicate how and when customers can seek assistance .
How banks can innovate to provide support
Banks already have extensive data on many of the warning signs of stress , such as missed credit card and loan payments , job loss or income reduction , and overdrafts and insufficient funds . Customers themselves identify ways that banks could support them , such as flexibility in loan repayment terms or temporary relief ( 49 %), fee waivers and reductions , especially for essential daily living , ( 45 %), and interest rate adjustments ( 42 %).
Banks need to build a toolkit of proactive financial wellbeing intervention techniques . They can then implement mechanisms to prevent worsening financial stress . Artificial Intelligence ( AI ) and data analytics can be a vital enabler for this , delivering personalised services rapidly and at scale . But banks must also reassure customers about the safety and ethical application of the technology .
Pre-emptively detecting stress can lead to better outcomes for both banks and customers , ultimately enhancing customer satisfaction and loyalty . The cost-of-living crisis is an urgent priority for all Australians , and even if the economic outlook improves , there will still be a need for banks to provide personalised customer care . �
It is clear that Australians are acutely feeling the cost-ofliving crisis , driving a re-evaluation of the role that banks play in mitigating financial stress .
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