A report released today shows the progress of a reform which is set to abolish mortgage broker commissions directly linked to loan size.
Independent governance expert Ian McPhee AO PSM released the report on April 17 after monitoring the Better Banking Reform Program for the last two years.
Major parts of this reform have revolved around changes to the way banks pay their staff, as outlined in the Sedgwick Review completed in 2017, such as removing direct sales incentives and introducing balanced scorecards in each bank.
The review set a deadline for these changes to be completed by 2020 however the report suggests banks are already well underway in implementing these reforms.
The program, which began in April 2016, is meant to achieve three outcomes – better products, better service and better culture.
Following the report, Westpac CEO Brian Hartzer reaffirmed the bank’s commitment to rebuilding customer trust.
He said: “While we are working towards full implementation of the recommendations in the Sedgwick Review, we are also integrating the recommendations with our existing strategy, to ensure that how we engage with our people and customers is in line with our vision to be one of the world’s great service companies, helping our customers, communities and people to prosper and grow.
“In addition to implementing the industry’s Better Banking Initiatives, we proactively review our products, processes and policies on a regular basis to ensure they serve our customers’ interests. We have made over 150 changes, including reducing the number of consumer products on offer by more than 50 per cent, cutting transaction fees for 1.3 million customers, offering a low rate credit card, and removing ATM fees.”
Australian Banking Association CEO Anna Bligh thanked McPhee for his oversight over the last two years providing independent governance advice and monitoring for the ambitious industry reform program.
Bligh said: “The industry has set a cracking pace on some of the toughest reforms in over a decade, as detailed in Mr McPhee’s final report, however there is still further work to be done to bed these down.
“Banks have made a large investment in reform to better meet community expectations, such as changing the way bank staff are paid and improving customer protections under the new Banking Code.
“Banks are on track to meet the 2020 deadline set by the Sedgwick Review to reform the way they pay their staff including abolishing direct sales incentives and scrapping mortgage broker commissions directly linked to loan size.
“While this is the final report by Ian McPhee the industry has taken his advice and will be putting in place further arrangements for public reporting.”
Key initiatives already implemented include, customer advocates within banks to ensure complaints are resolved quickly and fairly; improving protections and awareness of processes for whistleblowers, including best practice industry guidelines; and stamping out poor conduct in the industry by ensuring staff with records of poor behaviour do not simply move around the industry.