Tomorrow marks one year on from the release of Commissioner Kenneth Hayne's final report of the banking royal commission, and quite a lot has happened since then.
The banking industry has had tougher rules imposed on it by both the government and regulators in the 365 days following the 76 reforms recommended by Commissioner Hayne.
According to the Australian Banking Association (ABA), the banks and regulators have made a "wide range" of changes since to fix the issues identified by the report, including:
- Launching a new Banking Code of Practice with over 200 new or improved customer rights
- Abolishing sales-based incentives for front line staff
- Allocating $5.8 billion to refund and remediation programs
- Introducing new code requirements for vulnerable customers
- Introducing higher penalties and longer prison sentences for those who break the law
- Granting ASIC more powers to investigate and ban people from the industry
- Transitioning many customers back to basic bank accounts with no account keeping or overdrawn fees and
no minimum deposits for customers with government concession cards
However, ABA CEO Anna Bligh conceded there is still a long way to go.
“When the final report was delivered by Commissioner Hayne, Australia’s banks were clear – they would learn the lessons, fix the problems and make it right,” Ms Bligh said.
“One year on from the delivery of his final report, a great deal of work has been completed to fulfill to this commitment."
Ms Bligh had previously said the new Banking Code of Practice, released mid-last year, had "real teeth", - she now says it will be strengthened further this year.
“We haven’t stopped there, we’ve overhauled the way we pay staff by abolishing sales targets to ensure we always, at all times, put the customer first," she said.
“The industry knows there is still much work to be done to earn back the trust of the Australian people and will continue to remain focused on this task."
Greater focus needed
A number of consumer advocates - including the Consumer Action Law Centre, Financial Rights Legal Centre and CHOICE - say the government has taken big steps towards cleaning up the finance sector, but has warned against the industry pushing back against further reforms.
The groups also said Hayne's vision needs to be fully implemented without "watering down" by the banking industry in order to improve Australian lives and communities.
"These reforms will only work if they honour the spirit, and not just the letter, of Hayne’s recommendations. At the end of this bumper crop of legislative reform, the Government must ensure there are no gaps and loopholes," the consumer advocates said in a joint statement.
The groups also noted the government is yet to provide more funding for community lawyers assisting victims of banking misconduct.
The sheer number of scandals the banks have still got themselves caught up in were also acknowledged, including the Westpac-AUSTRAC money laundering scandal and AMP charging dead people.
Consumer Action Law Centre CEO Gerard Brody said when it comes to the Royal Commission, the proof will be in the pudding.
"The overall impact of the Royal Commission has been positive, but we remain cautious of the risks that industry lobbying could undermine the spirit of Hayne’s recommendations," Mr Brody said.
“One glaring gap has been the Government's failure to respond to Hayne's commentary about greater need for legal assistance services. At Consumer Action, we've had a 170% increase in people contacting us for legal assistance, which is demand we simply can’t meet with current resources.
"More investment is needed to ensure people can get access to justice.”
The government has to far promised to act on 28 of the 76 reforms by June this year, and CHOICE Campaigns and Communications Director Erin Turner urged the Treasurer to act on his commitment to act on these reforms.
“The next six months will define the Government’s legacy in response to the Royal Commission," Ms Turner said.
- Struggling with a loan repayment? New credit reporting changes will protect Aussies in financial hardship
- 6 home renovation projects that may increase your re-sale value
- Westpac increases under-30s savings account rate to 2.50% p.a.
- Which lenders still offer cashback on mortgages?
- Should I press savings, credit or cheque on a EFTPOS machine?