Invest
2020 deadline for banks tipped as a win for Aussie investors
Banks operating in Australia are racing to have new pay and leadership structures in place by 2020, and a progress report today tips the end-customer will benefit from the sweeping changes.
2020 deadline for banks tipped as a win for Aussie investors
Banks operating in Australia are racing to have new pay and leadership structures in place by 2020, and a progress report today tips the end-customer will benefit from the sweeping changes.
A new, independent report by former public service commissioner Stephen Sedgwick was released today. It found that the banking industry is mostly “on track” to meet a 2020 deadline to overhaul problems in remuneration structures.
Key findings from today’s report include:
- Banks have reduced the use of bonuses based on financial incentives for front-line staff.
- Bonuses for bank tellers, typically 10 per cent of fixed salary, are now generally based on broader customer service measures, with “sales-based” measures greatly reduced.
- Salaries for other bank staff are now more weighted towards fixed pay, rather than variable bonuses.
- Banks are retraining front-line staff to encourage a “customer first” approach, rather than a “sales first” mindset.
In scathing detail, the royal commission last year shed light on the problems associated with a sales-based culture, and remuneration and bonuses based entirely on sales figures.
However, this industry overhaul has been in the works since April 2017, with a view to “deliver better outcomes” to Australian consumers.
CEO of the Australian Banking Association Anna Bligh believes the full implementation by 2020 will ultimately see banks focusing on “what’s best for the customer and excellent service, rather than simply sales targets”.
Does it stack up?
Despite the findings of today’s report, the corporate regular has found that six Australian banks have yet to complete their reviews into “fee for no service,” an issue which was brought to light during the royal commission and have been on the regulatory radar since 2013.
AMP, ANZ, CBA, Macquarie, NAB and Westpac have been named by ASIC for not having completed the review to identify systemic ‘fees for no service’ failures beyond those already identified and reported to ASIC since 2013.
The main reasons for the delays are poor record-keeping and systems within the institutions, which have meant banks are unable to access customer files to review.
Since 2014, ASIC has supervised the ‘fees for no service’ compensation program of 32 licensees, and as of this year the big four plus AMP have collectively paid or offered approximately $350 million in compensation.
While the reviews are incomplete, the institutions have provisions for more than $800 million towards potential compensation for further systemic fees failures.
RELATED ARTICLES
Stock market
International stocks: Diversifying your portfolio beyond Australia
In an increasingly globalized market, Australian investors have the opportunity to enhance their investment portfolio by incorporating international stocks. Diversifying your investments globally can ...Read more
Stock market
Stock market rally likely to continue regardless of Fed minutes tone, says deVere CEO
The bull run that has propelled Wall Street's major indexes to record highs this month is expected to continue regardless of the tone of the upcoming Federal Reserve minutes, according to Nigel Green, ...Read more
Stock market
US stock rally driven more by valuation growth than earnings, leaving tech names vulnerable: Innova
The strong gains in US stocks over the past year, particularly in the technology sector, have been driven more by expanding valuations than underlying earnings growth, leaving them exposed to a ...Read more
Stock market
Sun Silver to make its ASX debut with a $13 million IPO
Sun Silver Limited (proposed ASX Code: "SS1") has announced the opening of its Initial Public Offering (IPO) today, aiming to raise a minimum of $10 million and a maximum of $13 million (before costs)Read more
Stock market
Nasdaq hits record high, underscores the value of tech in investment portfolios
The Nasdaq Composite's surge to an all-time high last Friday highlights the importance of incorporating technology into investment strategies. Read more
Stock market
Apple sets an unprecedented profit pace within the GAFAM group in 2023
After navigating through the economic difficulties presented in 2022, the technology sector has demonstrated resilience and growth, with many companies seeing increases in revenue and stock value. Read more
Stock market
Fintech startup okoora unlocks over $3 billion in forex savings for businesses
Fintech innovator okoora has announced it has saved customers a monumental amount over $3 billion through international foreign exchange transactions. Read more
Stock market
Google's Gemini edges out ChatGPT4 in groundbreaking AI showdown
Google's latest AI model, Gemini, has edged out OpenAI's ChatGPT4 in a recent set of rigorous multi-discipline tests, marking a significant milestone in the large language model (LLM) sector. Read more
Stock market
International stocks: Diversifying your portfolio beyond Australia
In an increasingly globalized market, Australian investors have the opportunity to enhance their investment portfolio by incorporating international stocks. Diversifying your investments globally can ...Read more
Stock market
Stock market rally likely to continue regardless of Fed minutes tone, says deVere CEO
The bull run that has propelled Wall Street's major indexes to record highs this month is expected to continue regardless of the tone of the upcoming Federal Reserve minutes, according to Nigel Green, ...Read more
Stock market
US stock rally driven more by valuation growth than earnings, leaving tech names vulnerable: Innova
The strong gains in US stocks over the past year, particularly in the technology sector, have been driven more by expanding valuations than underlying earnings growth, leaving them exposed to a ...Read more
Stock market
Sun Silver to make its ASX debut with a $13 million IPO
Sun Silver Limited (proposed ASX Code: "SS1") has announced the opening of its Initial Public Offering (IPO) today, aiming to raise a minimum of $10 million and a maximum of $13 million (before costs)Read more
Stock market
Nasdaq hits record high, underscores the value of tech in investment portfolios
The Nasdaq Composite's surge to an all-time high last Friday highlights the importance of incorporating technology into investment strategies. Read more
Stock market
Apple sets an unprecedented profit pace within the GAFAM group in 2023
After navigating through the economic difficulties presented in 2022, the technology sector has demonstrated resilience and growth, with many companies seeing increases in revenue and stock value. Read more
Stock market
Fintech startup okoora unlocks over $3 billion in forex savings for businesses
Fintech innovator okoora has announced it has saved customers a monumental amount over $3 billion through international foreign exchange transactions. Read more
Stock market
Google's Gemini edges out ChatGPT4 in groundbreaking AI showdown
Google's latest AI model, Gemini, has edged out OpenAI's ChatGPT4 in a recent set of rigorous multi-discipline tests, marking a significant milestone in the large language model (LLM) sector. Read more
