fbpx
Skip to main content
Tropical Cyclone Seroja: Emergency Assistance

Banks will ensure staff pay structures put customer interests first

24 September 2016

Sydney, 23 September 2016: The Australian Bankers’ Association has provided its submission to Mr Stephen Sedgwick’s independent review of commissions and payments in retail banking, confirming the industry’s commitment to meet changing expectations.

“Banks are providing detailed information to Mr Sedgwick to assist him conduct his independent review,” Australian Bankers’ Association Chief Executive Steven Münchenberg said. 

“Banks have heard that the community wants change and we are responding. We want customers to be confident our staff are not paid in ways that encourage them to put their own interests, and the bank’s, ahead of what is best for the customer,” he said.

“The independent findings will be important for banks to build on the changes already made in recent years to how they pay staff, such as rewarding employees for providing good customer service and for behaving ethically.” 

The ABA submission sets out the industry’s reasons for establishing the independent review and confirms our commitment to remove or change any product sales commissions and other product based payments identified which could misalign with customer interests.

Mr Münchenberg said the Terms of Reference made sure the findings of the review would be evidence-based, with clear recommendations on action that should be taken. 

“We want to hear from the reviewer whether there are payments which should be removed or changed, and if there are, what options are available for the industry to take collective action,” he said.

“There are complex legal constraints on what the industry can say and do. Banks cannot share commercially sensitive and confidential information, nor agree to take collective action on how they pay staff because they are competitors and must act within the law.” 

The ABA submission includes legal advice that a joint initiative to address potentially conflicted pay structures would likely run foul of the Competition and Consumer Act 2010. 

“We therefore require authorisation from the Australian Competition and Consumer Commission, or similar regulatory approval, if the industry wishes to work together to agree on and implement changes to pay which build on the Future of Financial Advice reforms,” Mr Münchenberg said. 

A copy of the ABA submission is available here.

ENDS

Contact: Stephanie Arena 0477 470 677

@austbankers

bankers.asn.au

Latest news

1 / 3
Media Releases
Support available for customers affected by Tropical Cyclone Seroja
15 April 2021

Australian banks are ready to help customers in Western Australia who are rebuilding after the destruction inflicted by Tropical Cyclone Seroja. Communities in WA’s mid-west were devastated by the cyclone last week, when it crossed the coast near the town of Kalbarri. Geraldton, Northampton, Binnu, Chapman Valley, Mingenew and a number of other towns were… Read more »

Read more
Media Releases
Banks unite to help customers experiencing financial abuse
4 April 2021

Australian banks are launching updated guidelines on financial abuse as part of their continued focus on responding to family violence and elder abuse.

Read more
Media Releases
Banks call for consistent laws to prevent elder abuse
31 March 2021

Australian banks are urging state and territory governments to adopt consistent laws on powers of attorney to prevent elder financial abuse.

Read more