The FSU has provided a submission to the Australian Bankers Association in relation to their proposed bad apples register based on the feedback and survey results provided by finance workers across the industry.Read more
After months of controversy and scandal in our industry, everyone’s talking about ethical behaviour and how pay systems influence what happens within the finance sector.
The FSU is very concerned at the damage done to our industry by recent crises in life insurance, funds management, allegations of illegal behaviour in inter-bank rate setting and allegations of unethical behaviour in banking.
In response Labor Leader Bill Shorten and Shadow Treasurer Chris Bowen announced that a Labor Government will hold a Royal Commission into misconduct in the banking and financial services industry.
The Australian Bankers Association (ABA) (the industry association for banks) then announced a long term review of pay models, whistle blower protection, consumer protection, removing those guilty of poor conduct from the industry and a stronger commitment to regulatory action.
Sydney, 21 April 2016: Australia’s banks will today begin to implement comprehensive new measures to protect consumer interests, increase transparency and accountability and build trust and confidence in banks.
“This package aims to address consumer concerns about remuneration, the protection of whistleblowers, the handling of customer complaints and dealing with poor conduct,” Australian Bankers’ Association Chief Executive Steven Münchenberg said.
“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.
The plan, parts of which are subject to regulatory approval or legislative reform, will be overseen by an independent expert.
“We recognise the importance of having an impartial third party to oversee this process,” Mr Münchenberg said.
“The industry has appointed Gina Cass-Gottlieb, Gilbert + 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,” he 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,” Mr Münchenberg said.
A Shorten Labor Government will hold a Royal Commission into misconduct in the banking and financial services industry.
This is an important decision that was not taken lightly - it’s been made after careful consideration over an extended period of time.
This sector employs almost half a million people and it’s the fastest growing in the Australian economy.
Australia has one of the strongest banking systems in the world and Labor wants to make it even stronger.
The fact is, the confidence and trust in the financial services industry has taken a huge hit over an ongoing range of scandals and high profile consumer rip offs.
We need Australians to have confidence in their banks and financial institutions, to sweep away the doubt, to uncover and deal with unethical behaviour that compromises that confidence.
The ACTU welcomes Labor’s commitment to a Royal Commission into the Australian banking and financial services industry and calls on the Prime Minister to restore faith in this critically important sector.
Every Australian should be able to rely on financial institutions - whether they are trusting banks with their personal savings or dealing with them as a small business, trust in this sector is critical across the economy.
A Planet Money Pod Cast
A couple of weeks ago, we did a show about the massive scandal at Wells Fargo bank. How good employees were pushed to do bad things. Like opening up bank accounts that customers never asked for.
After the show aired, we talked to ex-employees who said, you know: The fraud, that's only half the story. Many of them said that after they left Wells Fargo they were surprised by how hard it was to get another job in banking. They'd apply, get to the interview, it'd go great. And then suddenly, silence and rejection. Like something was tripping them up over and over again right before they could get a new job. Some of them just gave up on banking all together.
Listen to the Podcast now here