31 August 2016
Sydney, 31 August 2016: Bank chief executives have confirmed their commitment to respond to legitimate concerns raised about the industry.
The Council of the Australian Bankers’ Association (ABA), comprising 16 bank chief executives, has acknowledged the industry had not always lived up to the standards customers expect.
“That is why, in April, the industry came together to announce a comprehensive package of new measures to protect consumer interests, increase transparency and accountability and build trust and confidence in banks,” Chairman of the ABA and CEO of National Australia Bank Andrew Thorburn said.
“The Council recognises the importance of delivering on these commitments as soon as possible, while giving time for consumer groups, community organisations, small business representatives, regulators and others to have their say and help guide us towards the right outcomes,” he said.
Former Commonwealth Auditor-General Mr Ian McPhee AO PSM is monitoring banks’ progress and providing public reports, the first of which was published in July.
The package covers many of the issues put forward as justification for a royal commission, including:
Remuneration: An independent review of how bank staff are paid is underway, to ensure that when people are rewarded for selling products and services they are putting customers’ interests first.
Interested parties are invited to make a submission to Stephen Sedgwick, former Australian Public Service Commissioner, by 9 September.
The protection of whistleblowers: Banks are committed to having the highest standards of whistleblower protections, so that people feel able to speak out against poor conduct and practices and are not disadvantaged if they do.
Handling customer complaints: A dedicated customer advocate will be established in each bank to give more support to people when they have a complaint.
Dealing with poor conduct: The banking industry is establishing an industry register to identify employees who have breached the law or code of conduct, so that poor behaviour doesn’t move around the financial services sector.
Bank conduct standards: An independent review of the Code of Banking Practice is underway. This will look at how banking practices can be improved to ensure they meet customer needs.
“Given the central role banks play in keeping people’s money safe, helping them make major purchases, including buying their homes, and enabling businesses, big and small, to invest in their futures, confidence in the banking system should be a core priority,” Deputy Chairman of the ABA and CEO of Bendigo and Adelaide Bank Mike Hirst said.
“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.”
“What is underpinning this bank failure is a number of things, but not least of all, it’s a very niche bank with high exposure to one part of the economy. And that’s the part of the economy that’s been quite volatile and troubled”