Australian banks and finance experts are joining forces to prevent financial services and products being weaponised by perpetrators of gender based violence.
Addressing the widespread issue of financial abuse, social enterprise Flequity Ventures has founded The Financial Safety Alliance, which brings together the Australian Banking Association, the Australian Finance Industry Association, the Customer Owned Banking Association and Arca.
The goal of the Alliance is to provide lenders with the tools to integrate financial safety by design principles into their products and services to minimise the weaponisation of financial products and give victim-survivors the support they need.
Flequity CEO Catherine Fitzpatrick said the Alliance, with finance sector industry associations, will help more than 200 banks and lenders to disrupt financial abuse.
“Together we’ll create tools to apply financial safety by design, closing the loopholes that abusers exploit and providing more consistent support to customers.”
The work builds on that of more than 40 banks who have updated their terms and conditions to ban the misuse of financial products for control or harm, putting more than 20 million customers on notice that financial abuse carries serious consequences.
Back in 2019, Fitzpatrick uncovered widespread abuse in online banking transactions while working as a banking executive, which has led her to spearhead leading industry reforms to crack down on the practice.
Speaking recently on the Women’s Agenda podcast, Fitzpatrick said that the financial abuse patterns they uncovered were horrific, after analysing 11 million transactions in a three-month period.
“We’d seen swear words in the transaction descriptions, which you shouldn’t be putting in a bank account, but they found patterns, which was people were sending small amounts of money just to write a message,” Fitzpatrick says. “And so it was sometimes as little as one cent at a time, and then they would do it on a repeated basis.”
“When we looked at the demographics, what we found is that there were a lot more young people who were using a bank account as a messaging service. And when it was from men to women, it was often much more violent and aggressive.
“We found out of those 11 million transactions, 8000 were really serious examples of really horrendous abuse.
Fitzpatrick says one example stood out to her, where the perpetrator had sent 900 messages of abuse to their victim.
“It cost the abuser $9 to have this rain of terror, including messages like: ‘I’m out the front, I can see you. I want to kill you’.”
In an effort to put an end to such abuse, the Financial Safety Alliance is seen as a significant step forward in the finance industry.
“Through this coordinated action, Australia is setting a new benchmark for how financial institutions can work together to prevent abuse and safeguard customers,” said ABA CEO Simon Birmingham, adding that “Australian banks are taking world-leading steps to help embed financial safety by design principles in banking products, helping stop abuse before it occurs.”
AFIA CEO Diane Tate said the finance industry is stepping up to protect vulnerable customers, with non-bank lenders adopting safety-by-design and practical support into everyday finance.
“Australia’s finance industry stands united to deliver strong, consistent protections and pathways to support those experiencing financial abuse,” Tate said.
“This joint initiative puts customer wellbeing at the centre of innovation, strengthening trust across our industry through embedding safeguards that put people first.”