A major bank that was chastised by the royal commission for paying non-finance professionals to refer loans, has announced it is to end the scheme.
NAB will end its ‘introducer’ payments program as part of its renewed focus on becoming a “better bank”, effective from 1 October 2019.
CEO Philip Chronican said, “Through the royal commission we heard clearly that our actions need to meet the expectations of our customers and the community. We need to be simpler and more transparent to earn trust. We have to put customers first, to be a better bank.
“We want customers to have the confidence to come to NAB because of the products and services we provide – not because a third party received a payment to recommend us,” he added.
Chronican continued to say he was certain that ending the program was the “right thing to do to deliver better outcomes for our customers”.
“Like other businesses, we will still welcome referrals and will continue to build strong relationships with business and community partners. However, there will be no ‘introducer’ payments made,” he said.
“I understand the significance of these changes for our people and our industry, yet I am certain it’s the right thing to do. NAB has a significant role to play in leading the change our customers and the community want to see.”
During royal commission hearings, it was revealed that NAB had as many as 8,000 “introducers” – a headcount that was further revised down to 1,000.
While the bank’s then chief executive Andrew Thorburn maintained the introducer program was “fit for purpose”, the commission highlighted the potential for it to “corrupt the professional relationship between an adviser and their client".
The scheme was generating one out of every 20 mortgages for NAB and similar schemes were operated by other banks.
NAB has confirmed it supports 72 of Commissioner Hayne’s 76 recommendations, with 26 of these “either completed or in process of being implemented” according to a press statement from the bank.