Banks took a more proactive approach to dealing with customers facing financial hardship during the pandemic and some have maintained that approach over the past year, as interest rates have risen. ANZ reported that it has contacted more than 20,000 customers a month over the past 18 months to check on the ongoing suitability of their loans. The focus has been on customers with fixed rate or interest-only loans nearing maturity. ANZ’s managing director of Australian retail distribution, Katherine Bray, said improvements to data capability allow the bank to identify customers whose transactions patterns indicate potential future stress.  “This allows us to intervene early to get customers back on track,” Bray said. Assistance ranges from early hardship offerings to simple repayment reminders to ensure sufficient funds are in the repayment account. Speaking at the bank’s ESG update on Monday, Bray said: “These reminders have been successful, with a 31 per cent improvement in on-time payment for those we reached out to.” The bank has also established an “extra care hub”, a specialist team to assist customers impacted by family violence. This includes makes changes to banking arrangements and assistance in rebuilding financial independence. Bray said the early intervention is having a positive impact. More than 70 per cent of people who receive hardship assistance are back in good shape with their home loans within 12 months. ANZ is also changing the way it handles customer complaints. This includes the appointment last year of a customer fairness adviser, former AFCA banking and financial services lead ombudsman Evelyn Halls. “We have added an inclusive design assessment to our product life cycle. And we are establishing a customer advocacy forum,” Bray said. Last year, the Australian Financial Complaints Authority praised banks for doing a better job handling hardship applications and complaints. AFCA chief executive David Locke said the investment banks made in systems to manage loan repayment deferrals and other forbearance measures during COVID resulted in a permanent improvement in the way a number of them handle customer hardship notifications and disputes. AFCA saw a 40 per cent drop in financial difficulty cases during that period.  The improvement is not universal. Locke said some financial institutions have gone backwards over the past couple of years, but overall things have improved. Earlier this year, the Banking Code Compliance Committee also produced a mixed report card on banks’ handling of financial hardship. It said there has been a significant reduction in banking code breaches related to banks’ obligations to customers experiencing financial difficulty during the first six months of 2022. But it said a number of incidents involving delays in responding to applications, failure to document and communicate outcomes, and ongoing collection activities when customers are in hardship arrangements were a cause for concern.