Australia’s banks, facing a series of customer-related scandals, calls for a royal commission and extra scrutiny from the corporate watchdog ASIC, have come up with their own plan to regain trust.
They have announced a series of measures designed to protect consumer interests, increase transparency and accountability and build trust and confidence in banks.
“This package aims to address consumer concerns about remuneration, the protection of whistleblowers, the handling of customer complaints and dealing with poor conduct,” says Australian Bankers’ Association Chief Executive Steven Münchenberg.
“Customers expect banks to keep working hard to make sure they have the right culture, the right practices and the right behaviours in place.”
The statement from the banks as a group follows yesterday’s announcement that the corporate watchdog ASIC (Australian Securities and Investments Commission) is getting $127 million in extra funding so it can investigate misconduct in the banks.
The banking industry has been subject to several scandals recently including poor financial advice to customers, restricting payouts for disability insurance claims and allegations of rigging the bank bill swap rate.
Today’s move by the banks establishes an independent review of product sales commissions and product based payments.
Protections for whistleblowers will also be improved to ensure there is more support for employees who speak out against poor conduct.
The industry has appointed competition and regulatory lawyer Gina Cass-Gottlieb, a senior partner at Gilbert + Tobin, to lead the work on establishing the governance arrangements around the review process, public reporting and the selection of an independent expert to oversee implementation.
“Trust is at the centre of banking and is critical for the stability of our financial system,” says Münchenberg.
“The strength of our banking sector got us through the global financial crisis.”