ASIC finds systemic mortgage offset failures across Australian banks
ASIC review found banks mismanaged mortgage offset accounts, with over $55 million already paid in customer compensation between Sept 2023 and Aug 2025.
ASIC has identified widespread operational failures in mortgage offset accounts, resulting in customers overpaying interest. Compensation already exceeds $55 million with more expected as banks investigate further. The finding highlights weak product governance and data integrity controls in retail lending.
Signals heightened supervisory focus on retail product operations, remediation adequacy, and consumer outcomes obligations under design and distribution rules.
Action Required
Review offset account configurations, reconciliation controls, and remediation frameworks; assess exposure to similar product operational failures.
Systemic issue across multiple banks with material customer harm and clear supervisory expectation of remediation and control uplift.
Operational risk exposure elevated for retail mortgage products. Assess offset account controls, reconciliation, and customer disclosure processes. Ensure remediation programs are adequately scoped and reported.
“ASIC review found banks failed to properly manage offset accounts; over $55 million in customer compensation paid between 1 September 2023 and 31 August 2025, with more expected.”