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
Westpac hit with biggest fine in corporate history
Australian banking and financial services giant Westpac has reached an agreement with AUSTRAC to pay $1.3 billion for breaching anti-money laundering and counter-terrorism financing laws. ...Read more
Banking
6 ways to know you need a new bank
Unhappy with your current bank? Here’s how to know if you need to make a change. ...Read more
Banking
The banks beating the big 4 when it comes to customer satisfaction
Midsize banks are the biggest winners in a new survey of bank customer satisfaction. ...Read more
Banking
‘There’s no shame in deferring payments’
Deferring mortgage repayments is “a lesser evil” than having to sell property in the current market if you can hold off, a mortgage broker has advised. ...Read more
Banking
Standing on the shoulder of giants: How Australia’s fintechs can tap into open source
Australia has developed a vibrant fintech scene, which, in one year alone, grew by a staggering 37 per cent. The surge has ushered in a new era of financial products and services, from fully online ho...Read more
Banking
Billion-dollar bank blowout for fees for no service
To date, six of Australia’s largest financial institutions have reported a need to return more than $1 billion in compensation to customers who suffered as a result of fees for no service or non-com...Read more
Banking
Are bank branches becoming a thing of the past?
Banking may never be the same post-pandemic, with a new survey showing Australians have made some pretty drastic changes to the way they use and move money. ...Read more
Banking
Banks to extend COVID-19 loan deferrals beyond ‘September cliff’
Australia’s banks will now extend loan deferrals for another four months for customers who have been impacted by COVID-19 pandemic, as creditors try to avoid the September cliff. ...Read more
Banking
Westpac hit with biggest fine in corporate history
Australian banking and financial services giant Westpac has reached an agreement with AUSTRAC to pay $1.3 billion for breaching anti-money laundering and counter-terrorism financing laws. ...Read more
Banking
6 ways to know you need a new bank
Unhappy with your current bank? Here’s how to know if you need to make a change. ...Read more
Banking
The banks beating the big 4 when it comes to customer satisfaction
Midsize banks are the biggest winners in a new survey of bank customer satisfaction. ...Read more
Banking
‘There’s no shame in deferring payments’
Deferring mortgage repayments is “a lesser evil” than having to sell property in the current market if you can hold off, a mortgage broker has advised. ...Read more
Banking
Standing on the shoulder of giants: How Australia’s fintechs can tap into open source
Australia has developed a vibrant fintech scene, which, in one year alone, grew by a staggering 37 per cent. The surge has ushered in a new era of financial products and services, from fully online ho...Read more
Banking
Billion-dollar bank blowout for fees for no service
To date, six of Australia’s largest financial institutions have reported a need to return more than $1 billion in compensation to customers who suffered as a result of fees for no service or non-com...Read more
Banking
Are bank branches becoming a thing of the past?
Banking may never be the same post-pandemic, with a new survey showing Australians have made some pretty drastic changes to the way they use and move money. ...Read more
Banking
Banks to extend COVID-19 loan deferrals beyond ‘September cliff’
Australia’s banks will now extend loan deferrals for another four months for customers who have been impacted by COVID-19 pandemic, as creditors try to avoid the September cliff. ...Read more
More articles
Website Notifications
Get notifications in real-time for staying up to date with content that matters to you.
