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Bank CEOs speak out on the eve of Round Five of the Royal Commission focusing on super funds to say: Don’t forget the good things we do

by Lewis Panther | 02 Aug 2018
Round five of the Royal Commission is about to get underway with an expectation of a daily deluge of headlines of bad behaviour in banking and financial services. 500 FINSIA submission to Royal Commission says professionalism is the way forward to restore trust
 
The superannuation sector’s treatment of customers will come under the spotlight this time - along with what is widely expected to be a bruising grilling for ASIC and APRA.
 
But something fairly unexpected is also starting to happen as those in charge of several of the biggest institutions are starting a quiet fight back.
 
As members heard at FINSIA’s recent town halls, the appetite to talk about the good the industry does and has been doing is not there and would not sit well alongside often tragic stories. 
 
But it’s been a long held view that the worst examples of poor, and what in some cases could be illegal practise, is down to the behaviour of bad apples driven by their own greed and lack of respect.
 
The CEOs are not shying away from the embarrassment they feel at the horror stories coming out of Commissioner Kenneth Hayne’s hearings.
 
But they are starting to use the measured language you would expect of those in charge at corporate giants to point out the fact that the Royal Commission is only going to ever reveal the bad side of Australia’s banking and financial services sector.
 
Macquarie chairman Peter Warne told shareholders at the bank’s recent AGM he was “surprised” by some of the findings of the Royal Commission but not by the tone of the inquiry.
 
He said: “I think we’ve all been surprised at some of things that have come out of the Royal Commission.
 
“But I would actually encourage people to remember that this is a royal commission into misconduct.
 
“This is not a royal commission into conduct generally and is certainly not a royal commission into good conduct.
 
“There have been some bad stories, and I accept that.
 
“But the vast majority of customers in Australian financial services get good service, they’re very happy with their provider’s performance and actually like their bank -  believe it or not.
 
“Bad things have happened and bad things will always happen. The real issue is what we do about them, how quickly we get on and fix them, and ensure that they don’t happen again.”
 
He echoed comments made by NAB CEO Andrew Thorburn who urged the public to consider the “good job” the industry does for clients.
 
Mr Thorburn acknowledged that he was “embarrassed” by some of the revelations of misconduct identified by the commission.
 
He said: “I have been a banker all my career. I’m proud of what we do, and what banks do, but sometimes we get it terribly wrong.
 
“When you see some of the things in the royal commission, it makes you feel ashamed.
 
“Overall, that’s not the way our people are, and not the way the bank generally is. 
 
“This is a royal commission into misconduct, so all we’re going to hear, rightfully, is the wrong things, and they’re embarrassing, and they are wrong — but overwhelmingly, our people are great people and they do a good job for our clients.”
 
Bendigo and Adelaide’s new CEO Marnie Baker also pointed out the scrutiny the bank came under at previous hearings - over its lending practices from its Rural Bank business – had been dealt with and put behind them.
 
“What we have seen in the royal commission related back to a decade ago” she said. 
 
“Any issues raised at that point in time, we have worked to remediate and put in place changes in policies and processes.
 
"We are very confident that Rural Bank has the best interests of their customers at heart.
 
“Trust goes to the core of the integrity in an organisation. We are focused on creating awareness and reinforcing our positioning that we are doing the right thing by our customers
 
“That was lost in the royal commission. Instead, the focus was on what happened a decade ago. We are very confident that Rural Bank has the best interests of their customers at heart.
 
“I expect the bank will continue to grow and continue to do the great work it does which is ensuring farmers are getting financial support.” 

Chris Whitehead, CEO and managing director at FINSIA, said: “While it is right that the CEOs recognise the worst cases of bad behaviour are down to certain bad apples as members have been telling us, there is a trust deficit in the industry.

“Our belief that professionalisation is the best way to remedy that pre-dates the Royal Commission. 

“Consumer research carried out earlier this year backed that up with figures showing three out of five consumers would trust their bank more if staff had professionals standards.

“So we should all be striving towards professionalisation to rebuild trust in the industry and re-establish pride for those who work within it.”


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