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Banks must take action to restore trust and confidence

The Finance Sector Union of Australia (FSU) welcomes the Sedgwick Review as having made a serious contribution to the debate about the need to rebuild trust and confidence in Australia's banks.

The FSU agrees with the Review’s findings that acknowledge changes must be "one in - all in," with new pay models, new management culture and new ways to set and measure performance targets for everyone from front line staff to Chief Executives.

However the Sedgwick Review was commissioned by the Australian Bankers’ Association on behalf of the banks, using the ABA's terms of reference. The Review was limited to an examination of the bottom three tiers of retail banking jobs and was not provided with remuneration details of any staff above branch manager.

The limited terms of reference mean the Review did not examine the areas of banking that have been rocked by scandal over recent years.

FSU National Secretary Julia Angrisano said a Royal Commission into banking was needed to fully examine the activities of banks and the impact on staff and customers.

“What we need is a full inquiry into banking and the financial services sector so Australians can be confident that when they interact with financial institutions they won’t be exploited,” Ms Angrisano said.

“If we are to rebuild trust in financial institutions, it's not enough to deal with pay alone. Banks must also change management culture, the way performance targets are set and the way performance is managed,” she said.

Ms Angrisano said without legislation creating a level playing field for all financial service providers, Mr Sedgwick's recommendations for cultural change, revamped pay models, performance target setting and performance measurement will bring piecemeal change through staggered adoption over more than three years.

“Without supporting legislation, many of the key elements of the report will not be universally adopted by the industry and this could be fatal to the reform process.”

“We want the banks to immediately explain how they will respond to the report in regard to the internal reviews Mr Sedgwick is calling for.”

Ms Angrisano said FSU members would welcome the end of the humiliating ‘sales leader’ boards and poorly designed Net Promoter Scores as important first steps in changing the culture of retail banking.

“Our members are also seeking guarantees from the banks that they won't cut the pay of directly employed home loan lenders while sales and trailing commissions continue to be paid to third party brokers.”

“We are calling on each bank to immediately guarantee that they will meet with the union to discuss their response to the report and negotiate changes that rebuild trust and confidence in banking while providing certainty and security to staff.

Ms Angrisano noted Mr Sedgwick’s recommendations closely followed a similar review into remuneration practices in the UK. However the Australian review stopped short of recommending banking industry changes should be overseen by a government regulator.

Julia Angrisano is available for interview.

Media contact John Hill 0412197079.

Contact Details
John Hill
Mob: 0412197079

Authorised By: Julia Angrisano, National Secretary
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