“The Code outlines how individual and small business customers can expect to be treated by their bank; its review is an important part of a range of industry reforms to make banking better,” ABA Chief Executive Steven Münchenberg said.
“The industry recognises that at the moment the Code focuses a lot on how customers transact with their bank. We need a new Code that better outlines banks’ ongoing relationship with their customers, with a strong focus on ethical behaviour.
“Banks will use the recommendations to see how they can improve their commitments to customers, including working better with customers who are in financial difficulty through better promotion of our financial hardship support programs, fee-free bank accounts and financial inclusion programs.
“To better support small businesses, we’ll have a dedicated section for small business lending in the Code and improve the transparency of loan terms and conditions.”
Mr Münchenberg said it was important the new Code was easily understood by customers.
“The Code is a long and detailed document, with legal references, so it can be hard for customers to relate to. That’s why the Code will be written in plain English, so customers understand their rights and responsibilities when dealing with their bank,” he said.
“To hold us more to account, the industry is looking at how we can strengthen the governance of the Code and will work with the Australian Securities and Investments Commission on approving the Code.
“The industry will consider the 99 recommendations and work with stakeholders on the many complex, diverse and technical issues raised in the review, some of which are also the subject of Federal Government reviews. These include the Carnell inquiry into small business lending and the Ramsay review into external dispute resolution.
“We will provide a full response to the report in March and aim to release a new, enhanced Code by the end of 2017.”
Mr Münchenberg noted that the report included some views expressed to the reviewer about trust in banks.
“We recognise banks haven’t always lived up to the standards the community expects. That’s why we’re listening to customers about what we need to do better, and are making changes to our products, services and culture.
“Our Better Banking program looks at some of the influences on culture in banks, such as how we pay staff and treat whistleblowers, to see how we can improve.
“The independent review of the Code is an important part of our program to fix problems, strengthen commitments to our customers, and raise standards in banking,” Mr Münchenberg said.
More information is available at betterbanking.net.au.
The report from the independent review of the Code of Banking Practice is available at cobpreview.crkhoury.com.au. Mr Khoury also conducted a review of the activities of the Code Compliance Monitoring Committee and issued a separate report.
Contact: Jamin Smith 0478 333 316 or Nic Frankham 0435 963 913 (Stephanie Arena is on leave)
About the ABA
With the active participation of 25 member banks in Australia, the Australian Bankers’ Association provides analysis, advice and advocacy for the banking industry and contributes to the development of public policy on banking and other financial services. The ABA works with government, regulators and other stakeholders to improve public awareness and understanding of the industry’s contribution to the economy and to ensure Australia’s banking customers continue to benefit from a stable, competitive and accessible banking industry.
Source: Australian Bankers Association