Australian banks on Thursday promised unprecedented reforms to protect consumers and boost transparency following revelations of misconduct and ahead of a federal election set to be fought partly over calls for tougher sector oversight.
The package includes reviewing sales commissions, supporting whistle-blower employees and black-listing individuals for poor conduct, the Australian Bankers Association (ABA) said.
The politically charged announcement is the first co-ordinated industry-wide step by Australia's biggest banks to clean up their act in the wake of reputationally damaging probes into wealth mismanagement, insurance scams and benchmark interest rate rigging.
"We are very conscious that there are issues out there that people are concerned about," ABA Chief Executive Steven Munchenberg told reporters on Thursday. "We are now responding to some of the current concerns." Major lenders National Australia Bank, Commonwealth Bank, Westpac and ANZ Banking Group successfully pulled through the 2008 financial crisis but are now facing mounting criticism over misconduct even as they continue to deliver record profits.
The plan announced on Thursday, parts of which are subject to regulatory approval or legislative reform, would be overseen by an independent expert, the ABA said, although it gave no details about specific measures that would be taken.
The review would also look at the sensitive issue of remuneration, sales targets and incentives that have encouraged misselling of financial products, Munchenberg said.
It comes as political pressure is piling on Prime Minister Malcolm Turnbull to order a high-powered judicial inquiry into financial industry misconduct as he campaigns for a federal election in July.