17 April 2018
Today’s release of the final report of independent governance expert, Mr Ian McPhee AO PSM, shows that Australia’s banks have made significant progress on the Better Banking Reform Program, including finalising many of its measures.
The program, which began in April 2016, outlined a range of changes and initiatives to achieve three outcomes – better products, better service and better culture. Banks have been implementing these reforms over the last two years, with Mr McPhee independently monitoring their program as part of the industry’s commitment to accountability and transparency.
A major part of this reform has revolved around changes to the way banks pay their staff, as outlined in the Sedgwick Review completed in 2017. These changes include removing direct sales incentives, abolishing mortgage broker commissions directly linked to loan size and introducing balanced scorecards in each bank. The review set a deadline for these changes to be completed by 2020 however banks are already well underway in implementing these reforms.
Australian Banking Association CEO Anna Bligh thanked Mr McPhee for his expert oversight over the last two years providing independent governance advice and monitoring for the ambitious industry reform program.
“Ian McPhee and Price Waterhouse Coopers have done a rigorous job over the last two years in their independent monitoring of the implementation of the Better Banking Reform Program,” Ms Bligh said.
“The industry has set a cracking pace on some of the toughest reforms in over a decade, as detailed in Mr McPhee’s final report, however there is still further work to be done to bed these down.
“Banks have made a large investment in reform to better meet community expectations, such as changing the way bank staff are paid and improving customer protections under the new Banking Code.
“Banks are on track to meet the 2020 deadline set by the Sedgwick Review to reform the way they pay their staff including abolishing direct sales incentives and scrapping mortgage broker commissions directly linked to loan size.
“While this is the final report by Ian McPhee the industry has taken his advice and will be putting in place further arrangements for public reporting.
“Banks will be making further regular public reports on the success of the program and their ongoing implementation of the Sedgwick recommendations and the new Banking Code,” she said.
Key initiatives already implemented include:
- Customer advocates within banks to ensure complaints are resolved quickly and fairly
- Improving protections and awareness of processes for whistleblowers, including best practice industry guidelines
- Stamping out poor conduct in the industry by ensuring staff with records of poor behaviour do not simply move around the industry.
ENDS
Contact: Rory Grant 0475 741 007
Mr McPhee’s report is available here.
Latest news
The ABA welcomes the Federal Government’s announcement to extend the Responsible Lending Obligations (RLO) exemption for small businesses. ABA Acting CEO Vanessa Beggs said it was critical banks were able to provide small businesses with the finances they need to operate and expand. “One in four SMEs report wanting to increase their capital investment, so… Read more »
Today the Australian Banking Association Council has appointed Melanie Evans, CEO of ING Australia, as its new Deputy Chair. The Council thanked the outgoing Deputy Chair, Marnie Baker, for her outstanding leadership during her tenure as Deputy Chair since 2019 and throughout her 35 years in the banking industry. Ms Evans said she was honoured… Read more »
Anna Bligh: This new framework is a comprehensive approach to the terrible scourge of scams. This will mean that every single part of the scam chain where scammers try to take the hard earned money of Australians will now have to play a role in preventing scams, detecting them and keeping Australians safe. Journalist: I… Read more »