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Banks to launch review in wake of consumer concern

Australia’s banks will launch an independent review, which will include better protections for whistleblowers, in a bid to calm community concerns following a string of scandals.

Apr 21, 2016, updated Apr 21, 2016
Lender ANZ has pulled the pin on Pumpkin Patch.

Lender ANZ has pulled the pin on Pumpkin Patch.

The Australian Bankers’ Association released the new measures a day after the Federal Government announced a new commissioner at the corporate regulator, ASIC, who will focus on the financial sector.

“This package aims to address consumer concerns about remuneration, the protection of whistleblowers, the handling of customer complaints and dealing with poor conduct,” ABA chief executive Steven Münchenberg said in a statement on Thursday.

“Customers expect banks to keep working hard to make sure they have the right culture, the right practices and the right behaviours in place.

“That’s why the banks will immediately establish an independent review of product sales commissions and product based payments, with a view to removing or changing them where they could result in poor customer outcomes,” he said.

“Banks will also improve their protections for whistleblowers to ensure there is more support for employees who speak out against poor conduct.

“This plan delivers immediate action to make it easier for customers to do business with banks, including when things go wrong. For example, improved complaints handling and better access to external dispute resolution, as well as providing compensation to customers when needed,” he said.

 

Commonwealth-Bank-CBA

Münchenberg said the plan, parts of which are subject to regulatory approval or legislative reform, would be overseen by an independent expert.

He said it was important to have an impartial third party to oversee this process.

He had appointed Gina Cass-Gottlieb, Gilbert and Tobin Lawyers, to lead the work on establishing the governance arrangements around the implementation of the plan, the review process, public reporting, and the selection of an independent expert to oversee implementation of this initiative.

“The banks also support the Federal Government’s review of the financial ombudsman service, who is the independent umpire for customer complaints, to ensure it has the power and scope required to deal with a variety of issues that currently fall outside its thresholds,” Münchenberg said.

“Trust is at the centre of banking and is critical for the stability of our financial system.

“The strength of our banking sector got us through the global financial crisis. Since then banks have done a lot of work in improving customer satisfaction, strengthening their balance sheets, and making it easier for customers to do their banking wherever and whenever they want.

“The plan also responds to a range of expert reports and public inquiries that have identified key areas of reform, including the financial system inquiry.

“Banks recognise the importance of the community discussion about the delivery of banking and financial services, and are pleased to put forward this plan,”  he said.

_with AAP

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