Banks crackdown to prevent finance sector misconduct

Sydney, 9 June 2017: Bank customers can expect greater protection with new hiring measures agreed by Australia’s banks to crackdown on individuals with a history of misconduct moving from one job to the next undetected.

A new conduct background check protocol, released today, will allow banks to find out better information about a job applicant’s past employment history and conduct record.

ABA Chief Executive Anna Bligh said this was part of the industry’s transformation to make banking better for customers.

“Banks recognise they need to do more to stop individuals with poor conduct records moving around the banking industry from one job to the next escaping detection.

“Each bank has extensive, yet different, reference checking processes as part of hiring staff; so this will create more consistency in practices and mean anyone who does the wrong thing has nowhere to hide,” she said.

“Banks already conduct police record checks, but this might not always uncover serious types of misconduct. Anyone who is guilty of a serious type of misconduct that breaches bank policy or has the potential to cause harm to customers has absolutely no place in the Australian banking industry.”

The protocol will require banks to ask a series of fact-based questions about employment history and conduct, including whether someone was dismissed or resigned in circumstances relating to misconduct such as selling customer data, compromising customer security or wilfully and repeatedly breaching bank policies.

Ms Bligh said the industry had been working for nine months on the protocol to ensure it was developed fairly and focuses on identifying past misconduct of job applicants.

“This protocol is part of comprehensive reforms underway to change bank culture and better protect customers, including no longer rewarding employees based on the number of products they sell and improving protections for whistleblowers,” she said.

“A similar protocol has been adopted earlier this year by banks to improve the hiring of financial advisers.”

Ms Bligh said the ABA was continuing to work on the industry commitment to establish a legislated register to record misconduct of individuals working in banking, and would work with the Federal Government on registering executives under the banking executive accountability regime.

Key facts about the conduct background check protocol:

• Background checks can go back a period of five years and subscribing banks must request the information as part of their recruitment process, as well as respond to requests about current and former employees.
• The protocol will apply broadly across banks – covering their executives and other employees – and will be implemented no later than 1 July 2017 by major banks and 1 October 2017 by non-major banks.
• A privacy impact assessment was done to ensure the protocol meets important legal obligations, including how to share and store employee records and seek consent from job applicants to conduct the background check.

A copy of the protocol is available here.

ENDS

Contact: Stephanie Arena 0477 470 677 or Nic Frankham 0435 963 913

@austbankers

bankers.asn.au