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Bank staff express concern at insufficient training

by Lewis Panther SA FIN | 15 Nov 2018
Bank regulators in New Zealand have unearthed a lack of training for front line staff in branches.

Employees in call centres get better coaching, highlighting the lack of face-to-face interaction between customers and their banks.

The findings come from the joint report by the Financial Markets Authority and Royal Bank of New Zealand into Conduct and Culture which was set up in light of the Royal Commission in Australia.

Recommendations about improving those components to ensure better customer outcomes should be in place within a year, according to the authors of the report.

While training is not singled out as an area for improvement, the report shows it falls under the category where banks need to “raise their game” as Prime Minister Jacinda Aydern said.

The report says: “Capable, well-trained staff contribute to good conduct and culture within a bank. 

“All banks have different training programmes, such as on-the-job training, more structured electronic learning or facilitator-led courses, or a combination of these.

“Some of the staff we talked to expressed concern that the training was sometimes insufficient to fully understand the bank’s products and systems, particularly for new staff. 

“It appeared that some banks invest heavily in training and support for staff, while this is less of a priority in other banks.”

According to the report, examples of some areas for improvement in relation to training and support include:

“Staff training in retail branches appeared to be less structured and less comprehensive than training for staff in telephone-based contact centres. 

“Additionally, contact centres had more tools for oversight and coaching of staff, such as recording phone conversations.

“Most banks used electronic learning courses for staff to complete at their own pace. While these are useful, a lack of discussion and interaction during training can result in key messages being misinterpreted or overlooked.

“At one bank, staff told us they felt they did not receive sufficient training on the core aspects of their role, and we observed an expectation from management that new staff are recruited with all the required skills already in place.”

The report says that other banks had “significant” training and support but concluded more needed to be done.

“When there are weaknesses in staff understanding of the bank’s products or expected behaviours, the potential for customer harm is increased,” it says. 

“We strongly encourage all banks to review the content and delivery method of training to ensure these are appropriate to support staff in delivering good outcomes for customers.”

New Zealand adopted its Responsible Lending Code in 2015 to stamp out any underhand selling techniques after a raft of complaints.

But the review carried out earlier this year prompted a warning from FMA chief executive Rob Everett who said: “This is part of our response to the conduct issues highlighted by the current Australian Royal Commission into financial services.

“Links between the New Zealand and Australian banking and insurance markets have led to concerns that misconduct may be present in New Zealand, or undermine confidence in our markets.

“The work we are doing is consistent with our strategic priorities, and includes planned work we have accelerated.”

“While the FMA continues to foster a collaborative approach with industry, firms have now had sufficient time to understand their obligations and our expectations under the new regulations introduced over the last few years.

“We have become increasingly impatient with instances of a lack of attention to better customer outcomes and strong conduct frameworks from parts of the industry.

“In the year ahead, the FMA expects firms to be able to provide concrete evidence of progress they’ve made in putting good conduct outcomes at the heart of their business.

“We are becoming less tolerant of a lack of attention by firms or individuals. 

“We recognise that the behavioural changes and improved outcomes we seek may take time. However, we expect firms to be able to demonstrate progress in the areas noted above.”

FINSIA is holding a Royal Commission Town Hall focusing on “conduct and the implications for financial services in New Zealand” next month in Auckland. 



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