Morning Briefing: Banks act to strengthen community trust

Banks act to strengthen community trust
Australia’s banks will begin to implement comprehensive new measures to address concerns about pay, whistleblowers and complaints, the Australian Bankers’ Association announced yesterday.

“This package aims to address consumer concerns about remuneration, the protection of whistleblowers, the handling of customer complaints and dealing with poor conduct,” Australian Bankers’ Association chief executive Steven Münchenberg said.

“Customers expect banks to keep working hard to make sure they have the right culture, the right practices and the right behaviours in place.

“That’s why the banks will immediately establish an independent review of product sales commissions and product based payments, with a view to removing or changing them where they could result in poor customer outcomes,” he said.

“Trust is at the centre of banking and is critical for the stability of our financial system. The strength of our banking sector got us through the global financial crisis. 

Six actions were outlined in an industry statement with the ABA stating, "We believe these actions will further lift standards and transparency across the banking and financial services sector and bolster the existing strength of the regulatory framework."
1.Reviewing product sales commissions 
2.Making it easier for customers when things go wrong
3.Reaffirming our support for employees who ‘blow the whistle’ on inappropriate conduct                
4.Removing individuals from the industry for poor conduct 
5.Strengthening our commitment to customers in the Code of Banking Practice
6.Supporting ASIC as a strong regulator 

Rate rise coming, despite election delay
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The spectre of a looming Federal Election could bring some relief for Australian borrowers, with it predicted that lenders will wait until after the Australia has gone to the polls before announcing the next round of interest rate rises.

According to a report by MPA's sister publication Australian Broker, analysts at wealth management firm Morgan Stanley this week predicted in a research note to clients that there is a “high probability” that lenders will increase rates for borrowers following the election in the wake of cost pressures.

Banks are likely to delay the rate hikes until after the election so as to avoid the ire of a government campaigning for re-election.

“Despite the near-term pressures, we expect the timing of future re-pricing initiatives for the major banks to be delayed until after the federal election,” the research note.