Appearing before the financial services royal commission, NAB CEO Andrew Thorburn has acknowledged that he was wrong to oppose the inquiry, which he said has helped the bank identify its failings, noting that “most transformation opportunities come out of pain”.
Mr Thorburn said that the incremental deterioration of NAB’s culture was analogous to “drift fishing”.
“I love fishing and I drift fish [with] no anchor,” he said. “You start here and after 20 minutes you say, ‘How did I get here?’ - the tides take you.”
Mr Thorburn continued: “People inside the bank are a bit passive and were reinforcing the current system not because we want to. It is just we’re in the drift fishing boat.”
“I think what has happened this year is we’ve been confronted by some of the things we needed to be confronted by and out of that is coming good change and I believe will cause us to think about what is the purpose of the bank, and it’s about earning your clients’ trust and building a long-term sustainable business over five to 10 years.”
Remediation was ‘too slow’
The NAB CEO also acknowledged that the bank’s remediation process was “too slow” and was not a priority for the bank.
Counsel assisting the commission Michael Hodge asked: “Do you think in the past that NAB has had a tendency to view remediation as a distraction?”
Mr Thorburn replied: “I wouldn't say a distraction. I would say it’s like one of the many tasks we have to do. It didn’t have the priority that it should have, but I wouldn’t say that we thought of it as a distraction, no.”
Mr Hodge added: “Is the consequence of it not being thought of as a priority that, in your view, a lot of the remediation programs that NAB has undertaken have just been too slow?”
“Yes,” Mr Thorburn conceded.
Mr Thorburn added that the bank has since established a ‘customer remediation centre for excellence’ to improve efficiencies and ‘transparency of progress’ in the remediation process.
The NAB CEO also outlined that the bank “hadn't listened to regulators enough” and that NAB intends on working on a “receive mode” more.
"It's a bit more challenging with a conduct regulator than a prudential regulator, but I'm saying we need to lift the bar there," he said. "They should be helping us get better. We shouldn't be thinking of it as they're trying to catch us out.”
Conceding that the bank needs to do more to “get this right” on supervision and governance without the public scrutiny and publicity of a royal commission (and joking “we surely can't have this [a royal commission] every year"), Mr Thorburn said: “We've got to build our own muscle and strength.”
He concluded: “What our purpose is, is to serve our clients. To build trust. To have trust with them. And anything that you're seeing inside the bank, complaints, or problems, you should say: 'Is this enhancing trust or breaching it or breaking it?'. And if it's not enhancing it, you've got to get onto it a lot quicker.
“I think we've got to get our mindset back to: 'Why do we exist? What is our role?' And it is: to earn the trust of customers. And anything you're seeing inside the bank, both through controls that should pick it up and make sure it's not hidden, comes back to leaders, Commissioner. And why leaders believe they are playing a role in the bank, and that is to build trust with clients. And I think that will help flush these things out much more aggressively.”
[Related: ASIC grilled over rate rigging debacle]
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Charbel Kadib is the news editor on the mortgages titles at Momentum Media.
Before joining the team in 2017, Charbel completed internships with public relations agency Fifty Acres, and the Department of Communications and the Arts.