ABA CEO Simon Birmingham interview with ABC Sydney’s Thomas Oriti on offset accounts

E&OE
Radio Interview
ABC Radio Sydney
29 July 2026

Topics: ASIC report into offset accounts

Thomas Oriti: Do you have an offset account? I think most people with a mortgage do. If you don’t know what I’m talking about, it’s an account that’s linked to your mortgage and it saves you interest. So, I’ll give you an example. If you’ve got a $300,000 mortgage, let’s say, and you have $200,000 in your offset account, then you should only pay interest on $100,000 of that mortgage. That’s how it should work. But a review of eight banks by the corporate watchdog ASIC has found some banks aren’t delivering on the savings as promised, and they’ve actually paid out $55 million in compensation over two years because of this. And it’s really hard to work out if you’re actually getting the discount or not, right? You might have the offset account, but do you know that it’s working the way it should? Keen to hear what the banks say about all of this. Simon Birmingham is the CEO of the Australian Banking Association, who is here now. Good afternoon, Simon.

Simon Birmingham: Hello, Thomas. Good to be with you.

Thomas Oriti: Thank you for joining us. It’s quite frustrating, I imagine, for a lot of mortgage holders to hear this, right? Because the whole point of an offset account is to save on interest.

Simon Birmingham: Absolutely, and I understand the frustrations and the concerns that some people may have when they hear this. And so, the first point is to give a fair degree of reassurance, I hope. ASIC, as the regulator reviewed some 204 000 unique accounts, and they found some hundreds of problems. So, in well over 99 per cent of cases, ASIC’s report found that things were working as they should, and people should take reassurance from that. But they did find a small number of cases where they weren’t. That’s why we have checks and balances both within the banks because a number of these instances were self-reported by the banks, but also a regulator like ASIC undertaking this type of work to make sure that if there are problems, they get picked up on, they get rectified, people get compensated, and banks learn the lessons to try to minimise the repeat incidents of those problems in the future.

Thomas Oriti: Was it really a small number of people? I mean, the report I’ve got it here. It said that lenders repaid $55 million to hundreds of thousands of customers over two years for offset failures, and it warned that the figure could climb higher as that remediation continued.

Simon Birmingham: So, I can only go on what’s in the ASIC report, and the ASIC report says they reviewed 204 000 unique loans, and they identified instances of problems in only hundreds of cases. So that means that in terms of their analysis of the loans, the accounts they looked at, well over 99% they didn’t identify problems in. But there’s no showing away from the fact they did identify problems in those few hundred cases. In those few hundred cases, the steps that should be taken have been taken in terms of problems rectified, compensation paid, and one of the things the report does quite usefully is it calls out some best practice among some of the banks they reviewed, where the systems are working better than where they saw problems, so that there are some very clear messages and steps to be taken by those banks that had a problem to make sure it’s not repeated in the future.

Thomas Oriti: In terms of what that problem is, Simon Birmingham, the report looked at eight banks: AMP, ANZ, Commonwealth Bank, Credit Union Australia, HSBC, ING, Macquarie, and Westpac. So, you know eight major banks. Have you, as the head of the association, asked them what went wrong here? Because we’re still, regardless of the number of mortgages affected, we’re talking about tens of millions of dollars in compensation for offset failures. Do you know what went wrong?

Simon Birmingham: Yeah, indeed. And it’s, I mean, there’s serious payments that are made, as they should be when banks get things wrong and compensation is offered. Again, that can be contextualised. There’s close to $350 billion that is held in offset accounts. So, I mean, the scale of dollars in offset accounts is enormous, and again, overwhelmingly, that is working as it should on your mortgage or my mortgage, providing the offset on interest paid. But things identified as issues…

Thomas Oriti: Yeah, but what went wrong?

Simon Birmingham: So, ASIC identified three key issues that they call out, issues arising from manual processes, and where in the middle of a loan certain changes were requested, and those changes may have essentially triggered a delinking between accounts and those manual processes didn’t pick that up or didn’t provide appropriate notice. Communication again about customers…

Thomas Oriti: So sorry, I was going to say just I’m just trying to put this in layman’s terms. So, some of the accounts that a customer thought were offset were not actually offsetting their mortgage. Is that what that means?

Simon Birmingham: That’s right. From a loan already established, already happening, customer went and made changes to it. Perhaps took it from being a variable loan to a fixed interest loan, or changes like that, that in triggering that change caused a delinking, and weren’t aware that that had been de-linked. So that goes to the second of the issues that ASIC identified, which is communication with customers about those issues, that where those manual processes or those interventions by customers might cause a delinking, there needs to be better communication processes in place, and so you can you can see from that what wasn’t called out was that there was some sort of widespread systemic failure in the way in which the accounts themselves were working. They go to particular incidences of communication, manual processes and obviously we’re talking here about a sample of more than 200,000 loans, and those few 100 instances amongst those hundreds of thousands of cases where those manual processes resulted in a failing that has been identified and absolutely as it should be, penalties paid, things corrected, and lessons to be learned.

Thomas Oriti: Okay, Dennis has texted in with an interesting question, Simon Birmingham. Dennis says, how far back did this check go? I’ve had an offset about 25 years ago. How do I know I was not duded? Dennis asks. I think there’s two parts of that question. Correct me if I’m wrong. The ASIC report examined bank processes between September 2023 and August 2025, didn’t it? So, about a two-year recent period. What can customers do if they feel, in the words of Dennis, “duded”.

Simon Birmingham: That’s right. So this ASIC review was over a fixed period, as you said, looking at eight banks, looking at more than 200 000 accounts in that period, and it is part of the multiple layers of safeguards that we’ve got in the banking industry, and that is of course the self-identification of problems and processes by banks that occurs and occurred in this instance, as well as a regulator like ASIC being able to come in and request information and identify any problems themselves. It is not a process like this intended to capture everything everywhere, because it’s about ensuring lessons learned through the system. If somebody has any doubts, well, they should talk to their bank, review their bank statements. In the end, yes, the individual calculations of offset accounts might involve some degree of difficulty, but actually, just monitoring data, month-to-month banking statements is an important thing that that people can do. Overwhelmingly, this report shows it’s working as it should. But we should all take that degree of care to make sure we’re checking our bank statements, it’s not just on issues like fraud to scams…

Thomas Oriti: How do you do that, though? How do you do that? But how do you? I mean, how do you know if you’re paying the right amount? It’s not an easy calculation, to be fair. If you just look at the numbers in your banking app, to know that the offsets are working the way they should. With respect, it just seems simplistic to say: make sure you look at your account to make sure that the bank isn’t chipping you in your offset accounts. How do you genuinely know they’re working?

Simon Birmingham: Which almost in most cases we all make a fixed monthly repayment on our mortgage, and if your offset amount account is growing in its value, then the amount of interest you’re charged should be coming down. That’s the simple thing to understand.

Thomas Oriti: But how do you know that the right amount of interest has been taken off the cost? It doesn’t seem like an easy, look maths was never my forte. Forgive me. It doesn’t seem like an easy calculation. If you look at your mortgage, it doesn’t say this amount of this percentage of interest has come off your mortgage, and this is the impact the offset account had. It seems like we are oversimplifying the actual calculation you have to make when you’re looking at the numbers yourself.

Simon Birmingham: Yeah indeed, to calculate the precise figure does require some more detailed maths, and nobody’s expecting that consumers will necessarily go and do that.

Thomas Oriti: Which is why they trust the banks to do it for them, and that’s not what’s been happening here?

Simon Birmingham: But well, it is overwhelmingly what’s been happening. It’s important not to create undue scare or fear in these cases, and to again repeat, well over 99 per cent of cases were found to be operating as they should. But we have these processes, and we have a regulator like ASIC with these powers, precisely to make sure we can create consumer confidence and to make sure that people can have that understanding as to that the system is working as it should, and where there are failings, they get picked up and they get called out, and systems are then put in place to rectify them. Now, in many cases, banks are also stepping up the tools that are available to consumers, and that is one of the things I expect will further happen out of this report, which is the dashboards on your banking app, making it even clearer as to what the offset amount is and how that is calculated on your interest.

Thomas Oriti: It does seem as though the current solution you’re offering is you’ve just got to check with the bank to make sure that the offset is doing its job. But I know is the bank ever going to admit that it’s not?

Simon Birmingham: Yes, they do, and that and the ASIC report identifies that there are many of these instances were self-reported by banks when they recognised the problem, action taken by those banks to self-correct, and that is that is called out and identified in the ASIC report. And again, it’s the type of step that that is there. That self-reporting culture of issues is an important part of expectations in today’s regulatory landscape. A lot has changed. Banks aspire to get these things right 100% of the time, but we are dealing in a world where there are tens of thousands of bank employees handling ultimately millions of accounts and loans, and that means that sometimes those manual processes will see an error occur. What’s important is that the systems pick that up and identify it in the small number of cases where it happens and get it fixed. I wish I could say hand on heart, one hundred per cent of the time, all of the time, everything will be perfect, but that’s not a realistic promise to make. What we’ve got here is that well over 99 per cent of the time it’s working as it is, and the systems have identified areas for improvement, and they must and will be acted on.

Thomas Oriti: Okay, should there be. Sorry, I’m not trying to advocate people losing jobs. I don’t want to make it sound like this comes out this way, but I mean, why is anything manual these days when it comes, surely, and the impact an offset account has on your mortgage repayments is it’s a set figure, it’s a percentage. Why isn’t all of that automated? Why should we have any failings at all? Why should anything still be manual when it comes to you know the impact of offset accounts on your mortgage repayments?

Simon Birmingham: That’s why when we we’re talking about what the problems with this are, they were more problems in relation to an issue of an account not being linked. That, in terms of a point of data entry or a step that should have been taken to give a customer a bit of extra information when they were making changes at that midpoint of the loan cycle, that those things hadn’t happened adequately. So again, it’s not so much a case of the technology working that creates a systemic problem. It’s a case that in these individual instances where somebody has changed their account, made different variations, or indeed just a process step has not occurred as it should have occurred,

Thomas Oriti: $55 million of instances. It’s you know, it’s no, it’s not exactly a minor thing, though.

Simon Birmingham: It’s not a minor thing, but again, nor is the size and scale of our banking industry. The $350 billion worth of money held in offset accounts, which has grown some 28 per cent over the last couple of years. Australians are putting more into those offset accounts. It is a big part of the buffer that exists in our economy at present, which is why there’s been resilience even in these tough times as people have faced mortgage increases in their rates and so forth, that those buffers are very very important, and it’s put many many Australians ahead in their loan repayments and given them that extra security, and it’s why it’s so important, and why I’m not shying away from the fact there are problems to be fixed. That’s really important to acknowledge, but I also want to highlight and emphasise that most people, overwhelmingly Australians, can and should have confidence because that is a key finding in this report that that this was a small number of instances. We want to learn those lessons and get those things fixed for the future, but it shouldn’t undermine the confidence Australians have in using something that is a very valuable tool, used more in Australia than it is in many other economies, to help reduce mortgage payments that people face.

Thomas Oriti: Appreciate you coming on, Simon. Thank you very much for joining us.

Simon Birmingham: Always happy to Thomas. Take care.

Thomas Oriti: Simon Birmingham there, the CEO of the Australian Banking Association, joining us in the wake of that report from ASIC this morning.

Ends