Australian financial institutions have a culture fixated on short term profits which has failed to properly serve customers, staff, or the community and has instead enriched senior executives.
Executive salaries which have grown to absurd levels have clouded the judgement of those in charge at the expense of the customer.
The evidence the Commission heard, and now the findings of the Commission confirm that culture must change. It will be a crucial test for whichever party forms the next Federal Government to ensure that the rotten culture in banks is addressed.
The Finance Sector Union is concerned that the recommendations in the Royal Commission report do not do enough to deal with the cultural failures.
As stated by Finance Sector Union National Secretary Julia Angrisano
"Commissioner Hayne report convincingly charts how self-regulation in the sector has failed. However, he does not do enough on recommending the required fixes.
"International experience demonstrates that culture change is a difficult process. As banks remain addicted to ever increasing profits and in denial over their problems, the necessary change will require concerted government and community action.
"The report details the fundamental link between pay models and culture. The failure to make any recommendations about pay other than in connection with front line or executive staff ignores how pay models impact the actions and behaviours of middle management.
"We need strong, independent and well-resourced regulators. The Union welcomes the recommendations extending the role of ASIC and APRA. However, given ASIC and APRA failed in the past, we are sceptical about their ability to do everything the Report recommends.
"The cosy relationship between the regulators and the institutions they regulate must end. The regulators must do a better job engaging with all stakeholders including staff, unions and consumers."
"The community expects regulators to do their jobs and make sure the banks are acting in the public interest and abiding by the law."
"Bank executives cannot be trusted to drive culture change. It should be incumbent on Boards and board members to take direct responsibility."
"The banks' need to understand their social license to operate is under real threat. Unless there is fundamental change, including greater engagement with staff and the community, nothing will change."
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