14 July 2016
Sydney, 14 July 2016: The Australian Bankers’ Association has today welcomed the release of Mr Ian McPhee’s first quarterly report on how the industry is progressing with new initiatives to protect customer interests.
“Since the initiatives were announced in April, banks have been working hard to ensure the reform process started off on the right foot,” ABA Chief Executive Steven Münchenberg said.
“Mr McPhee’s role has been to independently assess the progress we have made and to advise on appropriate timeframes to implement reforms.
“We are pleased that Mr McPhee has noted the genuine commitment by the industry to address issues, and our recognition that strong industry leadership is needed for us to meet our objectives,” he said.
The report highlights key milestones which have been met, including the start of independent reviews into the Code of Banking Practice and into commissions and payments in retail banking.
Former Executive General Manager of the Australian Securities and Investments Commission, Mr Phil Khoury, is reviewing the Code of Banking Practice, which sets standards of good conduct for banks.
Former Australian Public Service Commissioner, Mr Stephen Sedgwick AO, is reviewing product sales commissions and product based payments that could lead to poor customer outcomes.
The report also provides an overview of targeted implementation dates to enhance whistleblower protections, establish customer advocates in banks to help with resolving complaints, and create an industry register of employees with records of poor conduct.
Mr Münchenberg said the ABA welcomed Mr McPhee’s remarks about the significance of the initiatives as it recognised the industry’s efforts to bring about meaningful change.
“Banks will work hard to accelerate the implementation of the initiatives, while at the same time ensure it is done in the right way with appropriate consultation with regulators and other stakeholders.
“We expect the industry and individual banks will deliver on many of the initiatives ahead of schedule. For example, one bank has already announced its new customer advocate,” he said.
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“Australian banks are certainly better equipped now than they were in the GFC. They’ve got 2 to 2.5 times the capital reserves put aside for a rainy day than they had in the GFC”
“The Australian Banking Association (ABA) welcomes the agreement reached today on the proposed safeguard mechanism reforms, given it paves the way for the passing of a critical piece of legislation for Australia.
“This is about engaging with the entire banking ecosystem in order to ensure the accessibility of the sector’s services are best serving our diverse community now, and into the future.”