Australia's financial regulator has responded to complaints that the country's banks and financial services firms are being hindered from delivering statements, transaction documents and superannuation information electronically by outdated regulation.
ASIC today updated its regulatory guidelines on product disclosures to make them more technology-neutral and encourage the take-up of digital disclosure documents.
Banks and financial services firms are obligated to provide certain information to customers, but the sector has argued existing regulations are inflexible and don't align with the increasingly online methods by which customers engage with financial services providers.
The Commonwealth Bank was one of many organisations calling for the legislation to be reviewed.
The problem was also highlighted as part of the government's financial systems inquiry (FSI). The FSI panel found that the disclosure regime was driven by compliance rather than what was best for customers - resulting in lengthy and complex documents that often went overlooked.
ASIC last year acted on the complaints and partnered with AMP and Vanguard to test out better ways to digitally deliver updates on financial products to investors.
The test informed the agency's broader work around digital disclosures, which today saw relevant regulation updated to remove barriers to adopting the online method of communication.
Consent no longer required
Previously, financial services firms needed to obtain consent to use a customer's email address to communicate product disclosures - which often meant sending out physical mail.
Now, banks no longer need official consent to send digital communications and can start sending information to a customer's email address if it is already on file, rather than asking for approval.
For non-emailed digital communications, customers will need to be notified - by email, SMS, app or social media notification - that a disclosure document is available and directed to the information.
They will have seven days to opt out of the communication method if so desired.
"The measures announced today respond to changing consumer preferences, with ever increasing numbers of people transacting digitally," ASIC commissioner John Price said.
"The changes mean product disclosure statements and other financial services disclosure documents will be delivered to consumers digitally as the default option, unless the consumer opts out. This will reduce the costs of printing and mailing for businesses while preserving choice for those consumers who wish to receive paper."
ASIC said it was up to the individual company as to which method they chose to use.
"For example, a margin-lending product might work particularly well online because clients are likely to be monitoring their investments online," it wrote in its guidance.