Six banks failed to publish their principles on remuneration and incentives by deadline, says the latest report on ABA’s package of industry initiatives to protect consumer interests.
Participating banks had to publish their “overarching principles on remuneration and incentives" by the end of December 2017 as part of the effort to review banks' product sales commissions and product-based payments.
AMP Bank, Arab Bank, HSBC, ING Direct
, MyState, and Qudos Bank did not meet the deadline, but committed to do so by April 2018, the report said.
"This is a disappointing development given the attention devoted to this initiative by those participating banks that achieved this milestone step, as well as the level of public interest in this area," said independent governance expert Ian McPhee, who wrote the report.
Banks committed to implementing measures to align their retail banking remuneration and incentive policies and practices with the Sedgwick Review’s recommendations. They have reported the most progress on variable reward payments and performance management arrangements of senior and (retail bank) middle level executives and retail bank staff.
In contrast, they have made the least headway on recommendations relating to arrangements with third parties, with a number of banks reporting that they are still in the planning stages.
“This reflects the time taken to establish the Combined Industry Forum and agree industry-wide responses. However, through the work of the Combined Industry Forum, practical measures to better align to the recommendations of both the Sedgwick Review and ASIC’s Report on Mortgage Broker Remuneration are being progressed,” said McPhee in the report.
The quarterly report is part of the banking industry’s commitment to have an independent oversight over the implementation of the initiatives by appointing an independent governance expert.
More lenders to change their commission models
Brokers to reveal lending data under CIF reforms
Royal Commission terms may exclude brokers