Australia's banks have welcomed the Government's timetable for legislative change following the Hayne Royal Commission and will work with the Commonwealth to continue implementing the Commission's recommendations.
While the forward agenda for the required legislative changes was announced this morning, banks are well down the track of implementing recommendations for which they are responsible to improve customer outcomes and earn back the trust of the Australian community.
Of the Commission's 76 recommendations, 54 were directed to Government and more than 40 of those recommendations require legislative change. 12 are to be taken forward by the regulators, 10 are for industry to implement – eight of these are specific to the banking industry.
ABA CEO, Anna Bligh said: "Since the Final Report was handed down six months ago, banks have been working to make changes to ensure that the recommendations become part of their operating fabric.
"Make no mistake, banks understand what the community and Government expects of them and are raising their standards to rightly meet those expectations.
"The recommendations included six changes to the Banking Code. All six are underway. The ABA has already drafted provisions implementing five of the changes, had them agreed to by banks and submitted them to the regulators for approval. These are now on track for full implementation by March 2020," Ms Bligh said.
The sixth change relates to the definition of small business. Consistent with the Commission's recommendation, the definition was recently changed in the new Banking Code to include businesses with fewer than 100 employees and this measure is now fully operational. The further recommendation to change the financial threshold from $3M to $5M will be subject to a review that will be overseen by ASIC who will examine the potential impacts on the provision of credit to small business. The review is underway and expected to be completed in early 2021.
"In relation to culture within banks, many, including the major banks, have already completed reviews. These banks have also introduced mechanisms for the ongoing tracking of culture to determine whether actions are having the necessary impact. But banks understand that effective cultural change is not going to come about through implementing the Royal Commission recommendations alone. It will only be achieved by putting the customer at the heart of every decision our banks make.
"In addition, all banks continue to review how they remunerate staff, with a focus on good customer outcomes, not just meeting financial targets," Ms Bligh said.
Following the release of the Final Report, the ABA established a dedicated Royal Commission Taskforce to oversee the industry's implementation of the recommendations. This Taskforce has met six times over the past six months and will continue to meet regularly to ensure the industry responds swiftly to the Government's legislative processes and acts to fully implement the recommendations.
