We hear you: banks announce more changes to make banking better

Sydney, 29 January 2017: Australia’s leading banks have announced new initiatives to deliver better products and services to customers, building on last year’s reforms that address concerns with the culture in banks.

The Better Banking program has been launched to build on the initiatives announced last year and introduce new initiatives reflecting research conducted in 2016 into what customers like and don’t like about banking, and what is needed to make banking better.

The new initiatives include:

• A renewed commitment to support customers in financial difficulty, including making our financial hardship support programs more accessible and working with financial counsellors to support the setup of a new debt repayment service to help people manage multiple debts.
• Providing more support to farmers and small businesses by introducing new best practice standards on valuation practices and how banks appoint receivers. We will also work on developing financial literacy resources and tools for small businesses and farmers to help them maintain and grow their business.
• Helping customers better understand how they can switch accounts and banks by holding a roundtable in March with banks, consumer groups, and government representatives to identify customers’ underlying concerns about switching and how we can make it easier.

Chairman of the ABA and CEO of National Australia Bank Andrew Thorburn said: “Our focus is on our customers and ensuring as an industry we provide the right service and right products to meet their needs.

“We have heard the concerns of Australians and we are committed to taking action so that banking with all of us is a better experience.

“This program of initiatives is our commitment to continue to raise the standards, service and trust in our industry,” he said.

Deputy Chairman of the ABA and CEO of Bendigo and Adelaide Bank Mike Hirst said: “All of these initiatives are designed to make it easier for customers to do business with banks and to ensure that, when things go wrong, banks will do the right thing and work with the customer to fix the problem.”

ABA Chief Executive Steven Münchenberg said this was a long-term commitment by the industry that started with listening to customer concerns and taking action.

“It includes the initiatives announced in April 2016 which banks are currently implementing, as well as products and services already offered by banks which we want to raise awareness of.

“For example, banks have a range of low cost and fee-free products and services to suit low income earners and retirees. Banks offer financial hardship support programs to help their customers through tough times. Banks also provide protection for customers who are the innocent victims of fraud. Many customers don’t know about these products and services, and we want to change that.

“Banks are also making a $1 billion investment in a new payments system to allow payments and transfers to happen in ‘real time’, overcoming the current delays when money is transferred from one bank account to another,” Mr Münchenberg said.

Other initiatives in the Better Banking program include:

• The appointment of customer advocates in each bank, to prioritise and escalate complaints. Major banks have appointed their advocates and other banks will have theirs in place before the end of March, ahead of the original bank commitment by June.
• Improved protections for whistleblowers, which will be in place from July.
• An independent review of the Code of Banking Practice (‘Khoury Review’), which will assess the existing Code and identify areas where banks’ standards could be improved. The findings of the independent review are expected in early February.
• Banks have agreed to identify and share information about financial advisers with a history of poor conduct, to help stop these advisers moving around the industry. The ABA’s Reference Checking & Information Sharing Protocol has been published and will be operational by the end of February.
• Banks are also expanding the protocol to apply to bank employees. This will build on banks’ existing recruitment practices by adding standardised questions on conduct background checks for prospective employees, and will be published in March.
• An independent review of product-sales commissions and product-based payments in retail banking (‘Sedgwick Review’) is moving into its final stages with a call for public submissions on the Issues Paper. The findings of the review on how banks pay and reward their staff are expected in early April.
• New resources about banking, including a list of the most common types of bank fees and how to avoid them, and a step-by-step guide on how to make a complaint with your bank.
• Support for the Federal Government’s financial adviser professional standards legislation currently before Parliament, and funding to establish the new professional standards body to help fast-track the adoption of the new standards across the financial services industry. The legislation will impose higher minimum education and entry qualifications, ongoing professional development obligations, and a mandatory code of ethics.
• Advocating for the introduction of a new compensation scheme for consumers who have received poor advice from a financial adviser so they aren’t left out of pocket if that adviser goes out of business. This will help rebuild trust and confidence in financial advice, not just financial advice provided by banks.
• Banks are backing a new ‘one-stop-shop’ external dispute resolution system to make sure disputes are resolved faster, easier and cheaper for customers. Professor Ian Ramsay is currently conducting a review of the system for the Federal Government.
• Banks are also supporting the introduction of a new industry funding model for ASIC and improvements to the breach reporting framework to strengthen regulation of the financial services industry.

An advertising campaign began today to inform the community about the Better Banking program.

“We’ve heard our customers, and we’re taking action,” Mr Münchenberg said.

ENDS

Contact: Stephanie Arena 0477 470 677 or Nic Frankham 0435 963 913