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15 August, 2016: Since the announcement in April of what banks are doing to strengthen customer protections, there has been much debate about the merits of our efforts. One of the many questions I’ve heard asked is, how effective is self-regulation?
This is where it’s important to understand the role of independent, impartial experts in these reforms. The measures are being overseen by someone who held the Federal Government to account for 10 years in his role as Auditor General – Mr Ian McPhee AO PSM.
Mr McPhee is in charge of monitoring and reporting on how the banks are delivering on their commitments. His first quarterly progress report published in July acknowledged that it will be no easy feat to achieve our objectives. But we think because the measures are so significant, they can bring about meaningful change for customers. We were pleased too that Mr McPhee noted the genuine commitment by the industry to address issues.
On top of Mr McPhee’s overarching governance, two independent reviews have kicked off.
1) Former Executive General Manager of the Australian Securities and Investments Commission, Mr Phil Khoury, is reviewing the Code of Banking Practice, which sets standards of good conduct for banks. It covers obligations in areas including the offer of banking services, information and disclosure, complaints handling, and dealing with customers with special needs and those experiencing financial difficulty. Submissions can be sent to firstname.lastname@example.org and are requested by 19 August 2016.
2) Former Australian Public Service Commissioner, Mr Stephen Sedgwick AO, is reviewing how banks pay commissions to its staff and third parties. This is to help ensure that when people are rewarded for selling products and services they are putting customers’ interests first. Submissions to the review are invited on any of the matters covered by the Terms of Reference and can be sent to email@example.com by 9 September 2016.
Banks have an important role in most people’s lives, providing products and services for people to receive income, make and receive payments, and save their money, enabling them to own their own home, purchase a car or go on a holiday, or build wealth and save for retirement. We know it’s absolutely essential that banks have the right practices and promote the right behaviour of their staff; that’s why we are undertaking these reforms with a strong governance process.
Work is also continuing with the other initiatives, including: