There have been ongoing calls for a royal commission, particularly from The Greens and Labour MPs, to look into ongoing reports of misconduct with the banking sector and financial services industry.
According to a new national poll commissioned by the Australian Bankers’ Association (ABA) and conducted by Galaxy Research between 6-9 October, of the 1,000 respondents that were asked whether they were in favour or opposed to action being taken “now” to change the banking industry, 46 per cent said that they would be in favour.
However, after being told what a royal commission could and could not do under Australian law (for example, being told that a commission could not impose fines, provide compensation, recommend actions that the government must implement, or change laws), the proportion of people that said their attitude toward a royal commission was “in favour” dropped to 41 per cent.
Further, after being told that the proposed plan for the royal commission into the banking sector would take two years to deliver recommendations, public support dropped to 36 per cent.
This drop was due to a 5 per cent fall in the number of people who said their attitudes were “strongly in favour” towards a royal commission (the number of people who said they were “in favour” held steady at 21 per cent throughout the survey).
Although 5 per cent of people said they were “strongly opposed” to action being taken now to change the banking industry, after being asked the two follow-up questions related to what a royal commission would entail, the number of “strongly opposed” doubled to 10 per cent.
In all, a quarter of respondents said that they were opposed to a royal commission by the end of the survey, with 39 per cent they neither supported nor opposed one.
Banks taking ‘action now’
The poll follows on from a similar survey conducted by Research Now last week, which indicated that two-thirds of people supported a royal commission into the banks.
However, the ABA has argued that the figure was inflated by the fact that the question asked of respondents was whether they “would support a royal commission, or similar independent inquiry….”
Steven Münchenberg, chief executive of the ABA, explained: “The open-ended nature of that question meant most respondents agreed with some form of investigation into banks, but it was impossible to assess real levels of support for a royal commission.
"In fact, [our] latest poll shows that a quarter, or 25 per cent, are actively opposed to a royal commission and people who neither support nor oppose a royal commission constitute the majority of those polled, at around 40 per cent of the sample.”
He continued: “People don’t believe a royal commission is the right way to go when they understand that it can’t impose fines on banks or force banks to pay compensation, and it can’t change laws or do anything other than make recommendations which the government of the day is not bound to implement.”
Mr Münchenberg went on to say that of those who believe banks need to improve the way they operate, “the majority want action now, not in two to three years’ time via a royal commission”.
He argued that “action now” is what the industry is already providing “across a wide front of reforms and initiatives”.
“Australia’s banks have heard the community wants change and we are taking action now,” the ABA chief executive said. “The industry is implementing extensive reforms to build trust and confidence in banks, including giving customers a greater voice when things go wrong.”
[Related: Banks slam call for royal commission]
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Annie Kane is the editor of The Adviser and Mortgage Business.
As well as writing about the Australian broking industry, the mortgage market, financial regulation, fintechs and the wider lending landscape – Annie is also the host of the Elite Broker and In Focus podcasts and The Adviser Live webcasts.