No mention of MORTGAGE FRAUD being bigger than ben hur...all else is a trade-off!
Bank senior executives avoid responsibility for misjudgments
The Australian 12:00am November 11, 2016
Richard Gluyas
Accountability for mistakes or unethical behaviour is selectively enforced at the major banks, with those at the top able to keep their jobs despite a long list of industry blunders and misconduct.
In hundreds of pages of answers to a wide range of questions on notice from the House economics committee, the banks said none of their top executives had paid the ultimate price for governance failures, which mostly occurred in their trouble-plagued financial planning units.
Westpac revealed it had investigated 885 people alleged to have breached the bank’s code of conduct in the year to October, of whom 139 had been sacked. None of the terminations involved the executive leadership level.
Commonwealth Bank mounted 1421 investigations in relation to its 54,000-strong workforce over the same period. While 454 employees are no longer at the bank, only 16 were among the bank’s 1500 people at the executive manager level or above.
National Australia Bank chief executive Andrew Thorburn told the committee last month that the bank had dismissed 43 financial planners for misconduct.
However, NAB said in answer to a question on notice that no systemic issue had been identified to warrant the dismissal of senior executives, although its wealth division had been restructured and the executive team “significantly changed” since 2014.
ANZ told the committee incentive payments and pay increases had been withheld as a result of breaches of the bank’s code of conduct at its OnePath wealth division, but there was no mention of senior executive sackings.
The lack of accountability by senior executives for troubles on their watch was a key focus for the committee, which questioned each of the four major bank chiefs last month for three hours.
The committee, chaired by Liberal Party MP David Coleman, is expected to report to parliament on the hearings in the coming months
CBA was also asked a question on notice about its whistleblower processes, given it is in dispute with a whistleblower over alleged misconduct in the bank’s CommInsure arm.
The bank said it had received 150 reports to its SpeakUP Hotline service in the past year. Of those, 54 matters were reported anonymously, with protection sought from the bank’s whistleblower protection policy in a further 31 cases.
CBA said 115 of the 150 cases had not resulted in any formal disciplinary outcome or dismissal. A further 24 matters were the subject of continuing investigation.
Another area raised by the committee was competition and the ability of customers to switch their accounts from one bank to another.
Despite the introduction of measures to facilitate account portability, few customers are taking advantage of the opportunity.
ANZ, for example, revealed it had only received 11 “new-to-bank customer requests” in September, down from 12 in July and August.
Asked if the banks were taking more than 30 days to process requests instead of the required five, ANZ boss Shayne Elliott said switching accounts took co-operation on both sides.
ANZ, however, responded to other banks within two days. The Melbourne-based lender also said the range of options for managing payments and accounts would increase through the new payments platform, scheduled to go live late next year.
The NPP was “open access”, it said, and would allow consumers to make real-time payments using phone numbers or email addresses, instead of account numbers.
Customers wanting to change bank would be able to notify their new bank so their “addresses” held in the database could be updated and redirected to their new BSB, or branch code, and account number.
This meant existing payments from third parties to the customer could be automatically redirected.