According to a release from the Australian Bankers’ Association (ABA), the big banks have listened to their frustrated customers and are preparing to invest in a series of measures designed to vastly increase the quality of the customer service offered by the banks.
The planned improvements are apparently in response to the results of research from 2016 which examined what customers liked and didn’t like about banking.
— Better Banking (@betterbankingau) January 28, 2017
The package of measures will be introduced as the Better Banking program, which ABA chairman and National Australia Bank CEO Andrew Thornburn says represents “our commitment to continue to raise the standards, service, and trust in our industry”.
“We have heard the concerns of Australians and we are committed to taking action so that banking with all of us is a better experience,” Mr Thornburn says.
“This program of initiatives is our commitment to continue to raise the standards, service and trust in our industry.”
What exactly is Better Banking?
According to the ABA, the initiatives that form the Better Banking program include:
- A renewed commitment to support customers in financial difficulty, including making financial hardship support programs more accessible and working with financial counsellors to support the set-up of a new debt repayment service to help people manage multiple debts.
- Providing more support to farmers and small businesses by introducing new best practice standards on valuation practices and how banks appoint receivers. Banks will also work on developing financial literacy resources and tools for small businesses and farmers to help them maintain and grow their business.
- Helping customers better understand how they can switch accounts and banks, by holding a roundtable in March with banks, consumer groups, and government representatives to identify customers’ underlying concerns about switching and how it can be made easier.
- The appointment of customer advocates in each bank, to prioritise and escalate complaints. Major banks have appointed their advocates and other banks will have theirs in place before the end of March, ahead of the original bank commitment by June.
- An independent review of the Code of Banking Practice (‘Khoury Review’), which will assess the existing Code and identify areas where banks’ standards could be improved. The findings of the independent review are expected in early February.
- Banks have agreed to identify and share information about financial advisers with a history of poor conduct, to help stop these advisers moving around the industry. The ABA’s Reference Checking & Information Sharing Protocol has been published and will be operational by the end of February.
- Banks are also expanding the protocol to apply to bank employees. This will build on banks’ existing recruitment practices by adding standardised questions on conduct background checks for prospective employees, and will be published in March.
- New resources about banking, including a list of the most common types of bank fees and how to avoid them, and a step-by-step guide on how to make a complaint with your bank.
- Advocating for the introduction of a new compensation scheme for consumers who have received poor advice from a financial adviser, so they aren’t left out of pocket if that adviser goes out of business. This will help rebuild trust and confidence in financial advice, not just financial advice provided by banks.
- Banks are also supporting the introduction of a new industry funding model for ASIC and improvements to the breach reporting framework to strengthen regulation of the financial services industry.
ABA Deputy Chairman and Bendigo/Adelaide Bank CEO Mike Hirst says, “All of these initiatives are designed to make it easier for customers to do business with banks and to ensure that, when things go wrong, banks will do the right thing and work with the customer to fix the problem.”
— 7 News Sydney (@7NewsSydney) December 22, 2016
Do we underappreciate what banks already offer?
ABA Chief Executive Steven Münchenberg added that the measures represented a long-term commitment by the banking industry, but that the program includes “products and services already offered by banks which we want to raise awareness of”.
“For example, banks have a range of low cost and fee-free products and services to suit low income earners and retirees.
“Banks offer financial hardship support programs to help their customers through tough times.
“Banks also provide protection for customers who are the innocent victims of fraud. Many customers don’t know about these products and services, and we want to change that.
“Banks are also making a $1 billion investment in a new payments system to allow payments and transfers to happen in ‘real time’, overcoming the current delays when money is transferred from one bank account to another.
“We’ve heard our customers, and we’re taking action,” Mr Münchenberg said.
— 7 News Melbourne (@7NewsMelbourne) December 27, 2016