Banking reform program
By Diane Tate, Executive Director - Retail Policy, Australian Bankers' Association
31 October, 2016: As a bank customer, you rightly expect to receive good service and to be treated fairly when you have an issue or complaint. Banks know that they haven’t always lived up to the expectations of customers or the community in general, but we are working hard to earn your trust back.
For the past six months, banks have been making changes to better protect customers when things go wrong and stop things going wrong in the first place. Here is an overview of what we’re doing and where you can get more information:
- The four major banks have appointed dedicated customer advocates to help make it easier for customers to resolve complaints. These customer advocates have the power to go to the CEO if they think the bank is not fixing problems properly. Other banks are now looking at implementing a customer advocate. Find out more.
- All banks that provide financial advice are changing the way they hire financial advisers so they know a lot more about the conduct history of financial advisers before employing them. This builds on their existing practices and is designed to stop advisers with poor ethical standards moving around the industry. Find out more.
- Banks’ pay and incentive models are being put under the microscope to ensure that staff are not encouraged to put their financial interests ahead of customers’. The Future of Financial Advice reforms addressed financial advisers, this now looks at retail bank staff. Stephen Sedgwick AO is conducting an independent review and is due to report findings by March 2017. Find out more.
- The conduct standards of banks, as outlined in the Code of Banking Practice, are being independently reviewed by Phil Khoury. This aims to strengthen banks’ commitments to all customers, including homeowners, small businesses and farmers. Find out more.
- The ABA is inviting public feedback on how banks can strengthen their protections for whistleblowers, following independent research on international best practice standards. Banks need to make changes to their whistleblower policies to ensure they meet the highest standard by July 2017. Find out more.
With changes as big as these, it’s important there is someone impartial monitoring our progress. This is being done by former Auditor-General for Australia Ian McPhee AO PSM. He is providing public quarterly reports on how we’re doing, the latest of which was released on 21 October. The report acknowledges banks have made good progress so far, but there is more to be done.
These changes have been the culmination of work started by the ABA last year with consumer representatives, regulators, government officials and customers on what banks need to do to address concerns with conduct and culture. You can find out more about how the changes will affect you at betterbanking.net.au.
And there is more to come...