Your InFinance Publication

FINSIA’s InFinance keeps you up-to-date and in-the-know. 

Royal Commission Update

by Lewis Panther | 01 Feb 2018
It seems 2018 is going to be a year of reckoning for the banking and financial services sector here in Australia.Insight into the Royal Commission - The Standard - FINSIA

The Royal Commission gears up with its first public hearings later this month and a speedy schedule that will see an interim report by September followed by final recommendations out 12 months from now.

Talk about moving fasting and fixing things, to misquote the digital entrepreneurs' ethos.

But industry bosses have already grabbed the bull by the horns judging by comments coming from the big banks.

They had until the end of January to admit their mistakes and wrongdoings as part of the $75m royal commission.

That they had to condense their failings into submissions of no more than 50 pages led to a collective raised eyebrow among financial commentators.

While it might seem fortunate the big banks, insurance firms and superannuation providers only have a limited amount of space and time to confess to their misdemeanours and examples of poor customer service over the past decade, there seems to be a feeling that the major players want to get everything off their chest. 

To walk away from commissioner Kenneth Hayne’s year-long inquiry with a clean slate is their top priority. 

And as the former High Court judge has indicated he is not planning to impose a raft of punitive fines or victim compensation measures, a full confessional course of action seems like the best way forward.

ANZ chief executive Shayne Elliott, who will be speaking to FINSIA members a few days after the initial hearing on 12 February, is certainly heading down that route.

In a letter to staff he acknowledged ANZ had to take it on the chin — and make improvements — though he did insist the bank was already putting things right.

He said: “Although many of the issues in our submission are known and have been or are being fixed — seeing them all in one document is confronting.
 
"Of course, it would be easy to lay the blame on a few bad apples or to say that these are largely historical technical glitches resulting from large complex IT systems. That would be wrong.

“My hope is the Royal Commission serves as a watershed moment in restoring the trust of customers and the community. 

"I’m committed to ANZ playing a significant role in repairing these relationships.

"For me, it’s completely unacceptable that we have caused some of our customers financial harm and emotional stress. I’m ultimately accountable for this and once again apologise."
 
Although Matt Comyn doesn’t officially start work until later April he will be acutely aware of the job Commonwealth Bank has to do to restore customer confidence after in lurched from one scandal to another.

The day after the 42-year-old was announced as the the CEO of Australia’s biggest bank it emerged CBA was being taken to court by the corporate watchdog over allegations it rigged interest rates.

CBA is already facing a civil case brought by Australia's financial intelligence agency AUSTRAC for alleged "serious and systemic non-compliance" of anti-money laundering laws concerning thousands of transactions.

The agency also accused the bank of further breaches, by failing to adequately monitor suspected terrorist financiers.

With an in-tray like that, saying the past six months for the bank have been “challenging” is a bit of an underestimation of the task ahead.

Nationals senator Barry O’Sullivan, who was one of the main drivers for the commission, is gunning for greater scrutiny of the banks.

"If you don't give ordinary Australians — hundreds of thousands of them — who've been seriously and adversely affected by the behaviour of finance and superannuation insurance, then I'd have to question what the point is of the inquiry in the first instance," he said.

ACTU president Ged Kearney has rallied customers who felt they were victims of malpractice to use an online tool that had been devised to collate their complaints.

Whatever comes out of the initial public hearings which start in Melbourne, FINSIA chief executive Chris Whitehead is confident it is an opportunity to restore confidence in the banking sector.

“The commission’s terms centre on conduct and culture within financial services businesses. That's the space in which FINSIA seeks to, and has for 130 years, added value to the industry,” he says. 

“Our aim is to work with industry to raise standards of professionalism by setting industry standards of individual competency and conduct to help restore consumer trust. This is key for delivering better outcomes for customers.”




Comments

Share this