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Category: Banking / Industry / Business, Economics and Finance / Consumer Protection / Alp

Bankers accuse Labor of cherry-picking figures, say complaints have fallen

Tuesday, 23 Aug 2016 07:14:37 | Penny Timms

Finance Sector Union says only a royal commission can bring about legislative change (AAP)

The Australian Bankers' Association (ABA) says suggestions that complaints about the financial services industry have sky-rocketed in recent years are misleading.

Key points:

  • Labor claims complains have gone up by 60 per cent
  • ABA says complaints have dropped by 11 per cent over 3 to 4 years
  • They say efforts to improve scrutiny of the sector are working

Labor said complaints about the finance sector had risen by 60 per cent between 2009 and 2015.

Steven Munchenberg, the chief executive of the ABA, said the figures released by Labor were "very selective".

Meanwhile, the union representing finance sector workers said the industry was damaged and the only thing that could fix it was political intervention.

The nation's financial services sector has been under increasing pressure to shape up, but the ABA said things were getting better.

Mr Munchenberg said that complaints against banks had fallen by 11 per cent over the past three to four years, "rather than having gone up, as Labor has claimed".

Labor's figures, which cover the period from 2009 to 2015, are being used by the party to push for a royal commission into the financial services sector, rather than an inquiry or tribunal.

"And the figures they've released fail to take into account that the Financial Ombudsman Service (FOS) jurisdiction was increased significantly a couple of years back," Mr Muchenberg said.

"And that means that a lot more customers can now raise their concerns with FOS, which is actually a good thing for customers."

Mr Munchenberg said the statistics showed that efforts to improve scrutiny of the sector were working.

"We know what the issues are, we have acknowledged the issues, and we're getting on an action fixing those issues," he said.

"And a royal commission also does run some risks particularly in the minds of international investors and whether they invest in Australia.

"It does call into question our level of confidence of the policies of successive governments, the quality of our regulators, and our bank management. So, it's both unnecessary and risky."

Earlier this year the ABA announced an independent review into the Code of Banking Practice.

The review is being led by former Australian Public Service Commissioner Stephen Sedgwick, and recommendations are expected to be handed down by the end of the year.

'Only a royal commission can result in legislative change'

Geoff Derrick, the acting national secretary of the Finance Sector Union, said the test of the Sedgwick inquiry would be whether or not the real causes of the crisis that have led to the scrutiny and public dissatisfaction with banking and financial services systems were uncovered.

He said an ingrained culture of profit chasing, poor practices, and a lack of strong leadership were what was driving problems in the sector.

"We honestly think that an independent inquiry at a judicial level is what's required because we suspect this will lead to some legislative change," Mr Derrick said.

"Individual banks shouldn't be left to voluntarily apply a code, and banks only cover about 80 per cent of the industry anyway.

"We need legislation and only a royal commission is likely to bring about that legislative change."

Mr Derrick said issues within the finance sector were having a devastating impact on staff.

"We see health effects that lead from things like loss of sleep to consequences to personal relationships," he said.

"But we also see very serious issues of people threatening self harm. We see people who say that they've had weeks off work.

"There are serious issues that go to the health and safety and wellbeing of the workforce that are driven by a bad system, a bad culture, that's top down, target driven."

He said only a royal commission that looked into management practices and the culture of the finance industry could lead to real change.

The ABA said the union would have ample opportunity to raise its concerns during the Sedgwick inquiry.

AustraliaPlus


 

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