Banks are dealing with an "implosion of trust and an explosion of scrutiny", former Queensland premier Anna Bligh has warned.
In her first speech since her controversial appointment as head of the Australian Bankers Association lobby group, Ms Bligh said it was her mission to reverse a "profound and fundamental shift in trust" against institutions like banks that is happening all over the world.
"Banks here in Australia are under an unprecedented level of pressure and scrutiny. I think there is a direct correlation between the implosion of trust and explosion of scrutiny," she told the Australian Financial Review's wealth and banking summit in Sydney on Wednesday.
While being the "envy of the world" for their strength and stability, even during the global financial crisis, Ms Bligh said the respect of customers did not match that level of peer respect.
Australian Bankers Association chief executive officer Anna Bligh speaks in Sydney on Wednesday. Photo: Louie Douvis
"Australian banks have lost trust in their ability to balance the interests of customers and shareholders. Politicians and regulators are responding to this with unprecedented levels of scrutiny."
Between the GFC in 2008 and 2016 there were 20 reviews involving the banking sector but in the past 12 months there have been 17 reviews announced, she said.
The flurry of reviews has coincided with a number of banking scandals where profit was put ahead of good customer service and advice.
Amid ongoing calls for a royal commission into Australia's banks, the government is expected to announce a second package of reforms to be handed down before the May federal budget.
The House of Representatives economics committee has recommended name and shame measures for bank executives found in breach of rules.
Ms Bligh said the traditional customer relationship with banks could never return to where it was because of the "dehumanising" nature of online banking and the declining focus on retail banking.
She recounted as a student having to borrow money from friends if she missed the bank's 3:00pm closing on a Friday.
"This is unimaginable for the current generation and, frankly, unimaginable for all of us," she said.
Banks understand that they are swimming against the tide of powerful global forces that can be extremely exhausting and dispiriting
The transition to online banking had resulted in banks seeming "anonymous, monolithic and opaque," she said.
She said one of her tentative goals at the ABA was to communicate the benefits of massive reform going on to a cynical public.
"Earning the trust of the Australian people will be tough and it is going to take some time. Banks understand that they are swimming against the tide of powerful global forces that can be extremely exhausting and dispiriting. But none of us can afford to give up on the goal of our banks winning back the trust of their customers and the public because that trust is integral to not only the banks themselves but to all
sectors in the new environment in which we all operate," she said.
On Monday, Ms Bligh said she was "coordinating diaries" to meet with Treasurer Scott Morrison.
Her appointment at the ABA had caused consternation inside the Coalition as it was seen by some as a bet on the return of a Labor government at the next election.
Later, Liberal Party MP David Coleman, the chairman of the economics committee, told participants that the Turnbull government was committed to "ratcheting up pressure" on senior bank executives, particularly those who report directly to bank chief executives, to ensure they maintain focus on customers.
No executives were sacked as a result of the high-profile banking scandals of recent times and Mr Coleman said the government was looking at committee recommendations to bring more accountability to managers.
He also advocated a "one-stop shop" for consumer complaints resolution, more power for the Australian Competition and Consumer Commission to monitor banks and reforms to encourage new entrants into the sector to shake up what some describe as the current "oligopoly".
"Disruption is a good thing for the consumer," Mr Coleman said.This article was first published by http://www.smh.com.auAuthor : Heath Aston