Hope for banking reforms

CONSUMER groups hope the banking royal commission leads to positive reforms that last long after the “fire and brimstone” around its findings.

The financial services industry is bracing for a review of its practices, although it is unclear how far commissioner Kenneth Hayne QC will go in today’s interim report or if the biggest hits will come in February’s final document.

Financial Counselling Australia CEO Fiona Guthrie said the scrutiny of the inquiry had made banks more conscious of making sure they did a good job assisting customers in financial hardship, including farmers, but a lot more needed to be done.

“We’re hoping we can get some long-lasting changes, particularly around remuneration structures and the particular issue of culture,” she said.

Financial Rights Legal Centre principal solicitor Alexandra Kelly hopes revelations from the royal commission lead to improvements in the internal dispute resolution systems of banks and other financial institutions.

She pointed to evidence from the insurance hearings about complaints going back and forth between customer service officers who made disparaging remarks about the customers, while not taking the issue seriously.

“I now have this fear that if I send someone to internal dispute resolution, is it just going to the shredder in the sky?” she said.

Consumer Action Law Centre CEO Gerard Brody said the royal commission had helped put the spotlight back on junk add-on insurance products.

“The royal commission focusing on it does bring it up above the parapet and that brings with it the opportunity for positive reform,” he said.

Mr Brody said one of the key causes of misconduct and conduct that had not met community expectations was the industry seeing its primary purpose as making money, rather than delivering a public service for the community.