Borrow
A year after the banking royal commission, what’s changed?
A year after Kenneth Hayne handed down the findings from the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry, has anything changed?
A year after the banking royal commission, what’s changed?
A year after Kenneth Hayne handed down the findings from the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry, has anything changed?
The Australian Banking Association said regulations have been tightened, top bankers have lost their jobs and billions have been paid out in fines to the bank.
At the release of the final report last year, the industry committed to learning the lessons, fixing the problems and making things right.
CEO of the Australian Banking Association Anna Bligh said that while much progress had been made to fix the problems identified by the royal commission, there was still a long way to go.
“One year on from the delivery of his final report, a great deal of work has been completed to fulfil this commitment,” she said.
Fixing the culture
The royal commission highlighted a culture of greed, which the industry body suggests is slowly being turned around.
The report found changing the way staff are paid, paying back customers and a new banking code were required to fix the issues found during the commission.
“To make things right, banks have this year alone set aside $5.8 billion on refunding customers or related remediation costs,” Mr Bligh noted.
“We haven’t stopped there, we’ve overhauled the way we pay staff by abolishing sales targets to ensure we always, at all times, put the customer first.”
Other changes include:
- Launching a new Banking Code of Practice with over 200 new or improved customer rights, with additional changes now approved by the regulator at the recommendation of the Commissioner
- Abolishing sales-based incentives for frontline staff
- Assigning more than 2,000 staff working to ensure customers get back the money they are owed
- $5.8 billion allocated to customer refunds and related remediation programs
- Better care of vulnerable people through new rules for debt collection services, new guidelines to improve access for customers with disability and new Code requirements to take extra care with customers experiencing vulnerability
Tougher rules
The royal commission showed new regulations were needed to help protect the vulnerable.
The Commonwealth Treasury previously suggested they will act on the 54 recommendations through an implementation roadmap.
The government has previously stated 90 per cent of its commitment will have been implemented or have legislation before Parliament by mid-2020.
The Australian Banking Association noted:
- 1,400 senior executives are now accountable under the Government’s Banking Executive Accountability Regime (BEAR). Maximum penalties for breaches under BEAR range from $10 million for small banks to $210 million for large banks
- Higher financial penalties and longer prison sentences for criminal behaviour
- New powers for ASIC to investigate, conduct searches and ban individuals from the industry
“Banks have a new Code of Practice which has real teeth, with independent monitoring and enforcement and will be strengthened even further this year,” Ms Bligh said.
Back to basics
Finally, the banking sector committed to becoming simpler better banks, with the banking association highlighting the banks:
- Are simplifying businesses to ensure a strong focus on core banking
- Have standardised basic bank accounts, with no account keeping or overdrawn fees and no minimum deposits for customers with government concession cards
“The industry knows there is still much work to be done to earn back the trust of the Australian people and will continue to remain focused on this task,” Ms Bligh concluded.
About the author
About the author
Banking
Australia’s big banks slammed over inadequate climate risk response
Activists say that Australia’s financial institutions are hedging their bets on climate change. ...Read more
Banking
RBA flirts with the idea of a digital dollar
The RBA is entertaining the possibility of issuing a digital currency or an eAUD. ...Read more
Banking
Big 4 served with suit over $200m failure
ANZ has been slapped with a lawsuit for allegedly misleading half a million customers in a $200 million failure. ...Read more
Banking
‘Walk the talk’, Westpac told after admitting to widespread failures
After the big four admitted to multiple failures and committed to remediating the issues, a law firm has urged Westpac to “walk the talk”. ...Read more
Banking
ANZ hit with class action over ‘interest-free’ credit cards
ANZ faces a class action for charging an outlawed retrospective interest on “interest-free” consumer credit cards. ...Read more
Banking
AMP demerger plans on track for early 2022
The wealth giant has confirmed plans to demerge its AMP capital private markets business will be completed in the first half of 2022. ...Read more
Banking
Westpac admits to widespread failures as ASIC launches legal action
ASIC has launched multiple legal actions against Westpac. ...Read more
Banking
Why your bank could be worried about your shopping habits
While there are plenty of opportunities to overspend during the busiest shopping period of the year, you may want to think twice. ...Read more
Wrapping up an eventful 2021
Listen now
What Omicron means for property, and are units right for first-time buyers? What is equity crowdfunding? Are industry super funds tapping into member funds to save their skins?
Listen now
Will housing affordability improve in 2022? Will buy now, pay later become the norm? Why are Aussies staying in failing super products?
Listen now
Who really benefits from crypto ETFs? How will the RBA respond to rising inflation? Could a mandate help address unpaid super?
Listen now
Banking
Australia’s big banks slammed over inadequate climate risk response
Activists say that Australia’s financial institutions are hedging their bets on climate change. ...Read more
Banking
RBA flirts with the idea of a digital dollar
The RBA is entertaining the possibility of issuing a digital currency or an eAUD. ...Read more
Banking
Big 4 served with suit over $200m failure
ANZ has been slapped with a lawsuit for allegedly misleading half a million customers in a $200 million failure. ...Read more
Banking
‘Walk the talk’, Westpac told after admitting to widespread failures
After the big four admitted to multiple failures and committed to remediating the issues, a law firm has urged Westpac to “walk the talk”. ...Read more
Banking
ANZ hit with class action over ‘interest-free’ credit cards
ANZ faces a class action for charging an outlawed retrospective interest on “interest-free” consumer credit cards. ...Read more
Banking
AMP demerger plans on track for early 2022
The wealth giant has confirmed plans to demerge its AMP capital private markets business will be completed in the first half of 2022. ...Read more
Banking
Westpac admits to widespread failures as ASIC launches legal action
ASIC has launched multiple legal actions against Westpac. ...Read more
Banking
Why your bank could be worried about your shopping habits
While there are plenty of opportunities to overspend during the busiest shopping period of the year, you may want to think twice. ...Read more
More articles
Website Notifications
Get notifications in real-time for staying up to date with content that matters to you.
