The Australian Banking Association (ABA) has welcomed a report that says banks and the finance industry have demonstrated ‘a clear commitment’ to improve customer outcomes and build public trust and confidence in banks.
The third Independent Governance Expert Report by Auditor-General Ian McPhee is a quarterly report on the progress of the Australian banking industry in implementing its package of initiatives to “better protect consumer interests, increase transparency and accountability, and build trust and confidence in the industry”.
The six initiatives, announced by the ABA in April last year are:
- Reviewing product sales commissions and product based payments;
- Making it easier for customers when things go wrong;
- Reaffirming support for employees who ‘blow the whistle’ on inappropriate conduct;
- Removing individuals from the industry for poor conduct;
- Strengthening the commitment to customers in the Code of Banking Practice; and
- Supporting ASIC as a strong regulator.
Mr McPhee said that it is “encouraging” that a number of banks have made early moves to implement measures, which he believes demonstrates their “clear commitment” to fulfil the aims of the ABA’s package of initiatives.
ABA executive director retail policy Diane Tate welcomed Mr McPhee’s recognition of the banks’ efforts.
“During the past quarter, a number of milestones have been achieved. For example, the industry released new guiding principles for banks to ensure their whistle-blower protections meet the highest standard,” Ms Tate said.
“Banks are improving the way they handle complaints with the appointment of customer advocates. The industry will also continue to support a new and improved external dispute resolution system, to simplify the current process and make it available to more consumers and small businesses.”
In reviewing the banks’ implementation of the initiatives, Mr McPhee said he expects that the coming 12 months will see key policy changes being made to implement and embed new approaches against all six, including reporting against performance indicators to better inform the wider community about the impact of the initiatives.
“In their implementation of individual measures, clarity in the banks’ service commitment to customers, in the light of the initiatives, will need to be reflected in bank policies, training and behaviours at all levels, if the overall objectives of the package of initiatives is to be successfully achieved,” he explained.
He also emphasised that the matters that the banks are working through are among “some of the most difficult matters to deal with in retail banking”.
“It must be acknowledged that as banks pilot their measures, some may not be as effective as originally anticipated … effective stakeholder engagement and communications will be key to the industry and individual banks bringing customers and the broader community with them on this journey,” he said.
Mr McPhee noted that there has been “slippage” to the timetable on a number of initiatives, which the ABA has advised that, during the next quarter, it will assess the industry implementation plan and advise to what extent changes are required to the timetable.
The next quarterly report is due to be delivered by 21 April 2017, which will mark 12 months since the announcement of the initiatives.
[Related: Banks reinforce commitment to consumers]