Last week, a big four CEO spoke to the changes the bank has made in the wake of the royal commission in an opening statement to the House of Representatives Standing Committee on Economics.
Westpac leader Brian Hartzer prefaced his statement by saying that the bank would, “consider the spirit and intent of the report’s recommendations and not take a technical approach to interpreting and implementing recommendations.”
According to the statement, Westpac has addressed 25 of the 53 recommendations relevant to financial services companies, while the remainder are dependent on further guidance from regulators. However, many of the actions cited were measures already in place prior to the royal commission.
After reiterating that less than 0.3% of customers lodge a complaint per year, Hartzer said that Westpac has recently introduced a team dedicated to helping vulnerable customers, as well as a Customer Outcome Committee to process more complex cases. In the past six months, the time taken to resolve complaints has been reduced by 30%.
Regarding the slowing economy, Hartzer said, “Price declines are more to do with housing supply and demand factors than with banks’ tightening credit. For Westpac, approval rates have been steady, and our risk appetite hasn’t changed significantly in the last 12 months.”
He did acknowledge that the newer extensive verification of customers’ expenses adds time to the approval process, but maintained that the issue is that fewer people are applying for loans rather than tightened lending from banks.
The Westpac CEO dubbed it “a natural response to a recent increase in the supply of housing, along with a fall in foreign investor demand and increased uncertainty about future returns from housing investment after a significant run-up in prices.”
Hartzer emphasised that the bank is attempting to move with caution and ensure that any changes made are free of unintended consequences that may come with altering the way in which mortgage brokers are paid or otherwise altering competition.