Corporate Responsibility - Contributing to the Community 

Overview

Banks in Australia value the communities in which they find themselves and are committed to giving something back to those communities.

Every year, community organisations receive over $90 million of direct support in various forms, from banks.

The banking sector also has a strong tradition of free education in financial skills and has in place a wide range of financial literacy and inclusion programs.

As a major employer, banks have adopted progressive workplace policies. Staff enjoy excellent pay and flexible workplaces.

Banks are vital to the Australian economy, being the third largest contributor to the nation’s Gross Domestic Product (GDP). By acting as major players in Asia-Pacific financial markets, our banks help promote Australia in international commerce.

Supporting community projects

While each bank is different, and their contributions change from year to year, the ‘average’ pattern of philanthropic involvement by banks is shown in Figure 1.

Figure 1: Philanthropic support

Source: Bank annual reports

‘Gifts’ are monetary donations to worthy causes. Whilst the numbers of charities supported by banks are too many to list in full here, examples include:

             Breast Cancer Institute of Australia;

             Ronald McDonald House;

             National Heart Foundation;

             Very Special Kids;

             Youth off the Streets;

             Disaster Relief in various states.

The banks are also proud supporters of small-scale local community programs all around Australia. Local branches are frequently involved in distributing funds.

‘Projects’ and ‘sponsorships’ support particular local organisations. Examples currently include junior cricket, Opera Australia, community cinema, heritage buildings, zoos, theatres, orchestras, and country arts festivals.

‘Environment’ projects involve banks in improving conservation and sustainability, such as the Banksia Awards, WIRES and the Holsworth Wildlife Research Fund. A number of banks are signatories to the UN Environment Program for banks.

‘In kind support’ relates to time donated by bank staff on worthy local projects:

              baking food for the homeless;

              providing one-on-one computer skills training welfare employees;

              sorting clothes and packing hampers for the homeless;

              wrapping Christmas presents for welfare agencies;

              painting wooden toys for disadvantaged children;

              marshalling and assisting with registration at a variety of events;

              manning telephones and counting cash at fund appeals.

Banks also contribute in kind by making available their branch facilities for collecting donations without charge.

Improving corporate transparency

Banks are going on record with major public commitments to improve reporting and consultation about their social obligations.

Transparency, the desire for fair dealing, responsible treatment of stakeholders, and positive links into the community get reflected in banks’ everyday activities and corporate responsibility practices.

Banks are producing Social Accountability Charters, not as a peripheral event but as a core practice. These set out what stakeholders can expect across marketplace practices, employee practices, occupational health and safety, environmental practices and so on.

An external reference point is the Australian Stock Exchange (ASX) best practice recommendations 3.1 and 10.1, in part reflecting the many legal, regulatory and prudential requirements applying to the industry.

A number of community forums have also been developed to ensure banks consult regularly with the community and hear customers’ expectations, including:

           the Australian Bankers’ Association’s (ABA) Community and Consumer Consultative Forum;

           the ABA’s Small Business Forum;

           customer advocates in individual banks;

           community forums run by individual banks.

The Banking and Financial Services Ombudsman (www.bfso.org.au) is a self-regulating scheme to settle disputes between consumers and financial service providers.

The 2002/03 Annual Report of the Banking and Financial Services Ombudsman (BFSO) noted a fall in the number of disputes:

"The number of cases dealt with by the Scheme in the year to 30 June 2003 shows that the number of new cases received declined by 13.3 per cent.

“The decline in disputes indicates that banks themselves are dealing more  effectively with their customers and taking steps to avoid escalation of disputes which require assistance from our office.”

During the year 2003, BFSO officers answered a total of 44,304 calls, and received a total of 6,930 written complaints.

Enhancing the nation’s financial literacy

The banking industry is committed to a long-term strategic priority of helping improve Australians’ financial literacy. 

This includes building understanding in the areas of investment, superannuation and retirement planning and in assisting the most vulnerable sections of the community, many of whom are struggling with financial skills.

Issues being addressed by banks and government in this project include:

     the availability of financial information in the community;

     the capacity of the public to manage risk;

     education to maximise retirement savings;

     improving the foundation skills of mature adults;

     enhancing awareness of the importance of saving;

     linkages between public, private and community information providers;

     the variety of multimedia tools used to spread information.

Individual banks already carry significant amounts of valuable generic advice on their websites about finance decision-making.

Moreover, each bank runs a number of major in-house initiatives to improve literacy.

Leading examples of member bank financial literacy programs include:

     practical kits about taking out a home loan;

     free public seminars for prospective home borrowers;

     research and funding for finance education of families from lower socio-economic backgrounds;

     specially designed education to target adults and children simultaneously;

     stakeholder partnerships with community groups such as YWCA, the Smith Family, Brotherhood of St
    Laurence, Dr Barnardos;

      financial maths competitions;

      e-learning grants;

      sponsoring National Literacy and Numeracy Week;

      farmers financial information;

      free investment workshops;

      guide books for treasurers of non profit organisations;

      sponsoring community credit advice lines such as Wesley Mission Credit Line and Credit Help Line;

      helping community organisations develop skills;

      adult learning programs especially low-income earners.

All these and other literacy programs like them are free.

Overall, the banking industry is doing a lot for empowering people with the appropriate financial skills, knowledge and information that will ensure they are better placed to make informed decisions about their money and avoid being misled on financial matters.


Valuing employees and their families

One in twenty five Australian workers is employed by the financial sector as a whole, according to Australian Bureau of Statistics (ABS) figures.

More than 145,000 people are employed onshore by Australian banks in particular, and another 60,000 overseas. Salaries worth $8,000 million a year are injected into the economy.

Wages paid by the financial sector are among the highest of any industry. Average weekly earnings in finance are $1,009, the second highest industry and well above the all-industry average of $744 (Figure 2).

Figure 2:  Average weekly earnings by industry

Source: ABS, Average Weekly Earnings Australia (Cat. No. 6302.0)

The banking industry aims to be an employer of choice, and individual banks have adopted people management frameworks aimed at ensuring that:

      employees maintain a healthy balance between work/life balance, supported by specific policies such as
     working partly from home;

      the make-up of the workforce is aligned over time with the broader Australian community and reflects 
     diversity, including self-identified disability and ethnicity;

      Occupational Health and Safety management systems are in place.

Staff satisfaction scores, published by a number of banks with their annual reports, continue to rise year by year.

Banks today offer excellent career opportunities for women. Currently, the gender ratio ranges between 40-60% females at Manager level and 25-30% at Senior Manager level. These ratios are likely to rise further, as banks have adopted higher publicly announced targets for women in executive positions.

Boosting the economy

Financial services is the third largest sector in the economy, after manufacturing and property/business services.

The sector’s contribution to the national economy is twice that of mining and one-and-a-half times that of agriculture.

The industry accounts for 8 per cent of Gross Domestic Product (GDP), equivalent to $52 billion (Figure 3).

Figure 3: Australia’s Real GDP by Industry – 2002/03

Source: Australian Bureau of Statistics 5206. National Income, Expenditure and Product. June Quarter 2003: Axiss Australia

Thousands of small and medium businesses supply goods and services to banks, providing jobs and income for tens of thousands of people.

Banks pay over $5 billion a year in Australian company tax - more than any other industry - which helps provide schools, hospitals, roads and social security benefits. This amounts to 17% of the total amount of company tax paid in Australia.

Ranked against other industries such as manufacturing or mining, the finance sector has been one of the most dynamic. It has expanded by 5% per year on average over the past two decades, which is higher than the mean of 3.7% for all industries economy-wide (Figure 4).

Figure 4: Australia’s Real GDP Growth by industry – 1984/85 to 2002/03

Source: Australian Bureau of Statistics 5206, National Income, Expenditure and Product. June Quarter 2003: Axiss Australia

In the international context, Australian banks play a strategic role and are vital to the national economy’s future in the Asia-Pacific region and the world (see box).

Created June 2004, revised June 2006

Internet: www.bankers.asn.au. Ph: 02 8298 0417 Fax: 02 828 0402

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