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The House of Representatives standing committee on economics has handed down its first report on the four major banks, making 10 recommendations.
The inquiry's first recommendation is the establishment of a banking and financial sector tribunal by 1 July 2017 to replace the EDR schemes the Financial Ombudsman Service, the Credit and Investments Ombudsman and the Superannuation Complaints Tribunal.
Relevant legislation should be amended to ensure the new tribunal is fully funded by the industry, said the report.
The inquiry found that the overlapping jurisdictions of the three existing EDR schemes creates confusion for consumers. In addition, the scope of the existing schemes is "inadequate", said the report.
Along with the establishment of the banking tribunal, the inquiry recommended the Australian Competition and Consumer Commission establish a team to make recommendations to the Treasurer every six months to improve competition in the banking sector.
The committee also recommended that deposit product providers be forced to provide open access to customer and small business data by July 2018.
Account switching was also addressed by the committee in light of the recently introduced New Payments Platform, with the government called upon to consider additional switching tools.
The report also recommended that the government consider loosening the rules around banking licensing to increase competition.
The major banks should also be required to engage an independent third party to undertake a full review of their risk management frameworks by July 2017, said the report.
ASIC should be granted power to collect recurring data about the banks' internal dispute resolution schemes, said the report. In addition, ASIC should establish an annual public reporting regime on the wealth management industry by end-2017, the report said.
Finally, the report recommended that whenever an Australian Financial Services Licensee becomes aware that one of its financial advisers has breached their legal obligations, all clients of that planner should be alerted.
Labor's dissenting report labelled the inquiry a "stage managed circus from its beginnings", and the proposed banking tribunal a "half formed [idea that] pushes responsibility for its development to yet another government inquiry".
The dissenting report called for the initiation of a royal commission into the bank "without delay" to "restore public confidence in the Australian
banking sector which has been badly damaged by the string of scandals in recent years".