- About us
- Banks in Australia
- Small business
- Financial advice
- Contact us
Australian Bankers’ Association Chief Executive Anna Bligh said the banking industry supported the recommendations made by Mr Stephen Sedgwick and would implement them in full as quickly as possible.
“This represents a transformational change in the way banks go about their business. It is a clear demonstration all banks are serious about making a better banking industry.
“There are 140,000 Australians who work in banks and care about their customers. The industry wants to ensure they are rewarded for the right things and getting the best results for customers.
“The independent findings will be important for individual banks to build on changes already made to remuneration to promote higher standards across the industry,” she said.
Former Public Service Commissioner Stephen Sedgwick AO was appointed by the ABA to review how bank tellers and other customer-facing bank employees, their managers, and third parties are paid by banks.
Mr Sedgwick has concluded that while there are not systemic issues warranting the outright banning of product based payments, some practices need to be changed because they could promote behaviour inconsistent with customer interests.
“Mr Sedgwick has not only identified that remuneration arrangements need to improve, but also that it needs to happen alongside a change in culture and approach from management,” Ms Bligh said.
“Banks don’t underestimate the changes recommended by Mr Sedgwick. This will not be easy for banks and there will be challenges. Changes will need to be made to bank policies, workplace agreements, contracts, staff training programs, internal controls, and performance management systems.
“This is not just about payments; it’s about governance and leadership. It’s not just about bank tellers and their managers; it goes up the line.
“Banks have heard the criticism about the sales culture. The industry needs to embed a customer-focused culture so customers have confidence banks are doing the right thing by them,” she said.
Ms Bligh said individual banks would take action to make changes to their businesses, while any industry-wide response would need to consider competition and other legal obligations.
“Banks will focus on the best way to change payments for their employees,” she said.
“Mortgage brokers play an important role in supporting competition in the home loan lending market, and the industry wants to ensure competition is preserved and customer choice is maintained.
“The ABA will seek guidance from the Australian Securities and Investments Commission and liaise with the Australian Competition and Consumer Commission as appropriate, in particular around changing payments to third parties like mortgage brokers,” Ms Bligh said.
Mr Sedgwick’s final report contained 21 recommendations about what banks should do to ensure payments achieve better customer outcomes, including:
“The ABA would like to thank Mr Sedgwick and his team for conducting a rigorous and thoughtful independent review,” Ms Bligh said.
More information on the Sedgwick Review, and a copy of his final report, is available at retailbankingremreview.com.au.
On 16 March 2017, ASIC published its report into the review of mortgage broker remuneration1.
Mr Sedgwick’s recommendations are consistent with ASIC’s findings and proposals to improve consumer outcomes and competition in the home loan market. Mr Sedgwick’s final report identifies how the ASIC proposals could be implemented by banks and the mortgage broking industry working together to protect consumer interests, increase transparency and promote competition.
ENDSContact: Stephanie Arena 0477 470 677 or Nic Frankham 0435 963 913