Alongside recommendations to remove broker commissions, the Royal Commission report yesterday made more than 20 referrals for bank bosses to face criminal charges.
As the first major bank to respond to the report, Commonwealth Bank CEO Matt Comyn said becoming a “simpler, better bank” was the group’s “number one priority”.
Comyn spoke openly during a hearing of the Royal Commission about his wish to remove broker commissions.
He added, “We are working through the Royal Commission’s Final Report and the 76 recommendations. Commissioner Hayne has called out the clear need for change.
“The Government has announced a comprehensive set of measures in response and we will work through the impact of these over the next few days.
“We note that the Commissioner has concluded that a number of matters regarding the Group’s conduct including in relation to superannuation warrant further investigation by relevant regulators and we will cooperate fully with these investigations.”
Comyn said the group was addressing past failings and implementing changes to improve their processes, including a new Code of Conduct.
ANZ has also since respnded, saying, "This is a defining moment for both our company and industry. It has been a humbling experience for me, our leaders and all our people - we have learnt from this and accepted responsibility for our failings.
“The final report and the insights arising from the Commission will change our industry for the better. It provides a thoughtful path forward that will ultimately result in a better banking system for all Australians.
“ANZ is committed to continuing the work and investment required to build a bank worthy of the trust and respect of our customers and the community as well as helping ensure these failures aren’t repeated."
Broker-related recommendations included the introduction of a best interest duty and ensuring brokers were subject to and regulated by the law that applies to financial advisers.
Speaking at a press conference immediately after the release of the report, treasurer Josh Frydenberg outlined what the government would be doing in response to the report.
Regarding the recommendations for the mortgage broking industry, Frydenberg said there would be moves to introduce a best interest duty and trailing commissions would be removed by 1 July 2020.
With the recommendations over upfront commissions, the treasurer said there would be a review into the impact of changing broker remuneration, after so many previous reviews raised concerns about such a move.
He said, “The Productivity Commission and the Murray Inquiry and the Sedgewick Review had all recommended against such a change, issuing a word of caution about what it would mean to competition. And what we don’t want to do is give a big tick or a free kick to the banks and effectively if you would take that business out of the hands of mortgage brokers… we would be giving it to the big banks.”
Labor’s shadow treasurer Chris Bowen has said the party will accept all of the report’s 76 recommendations in principle.