Labor notes today’s release of the Sedgwick Review of Retail Bank Remuneration and welcomes the Australian Bankers’ Association’s response that the banks will implement the review’s recommendations in full.
Implementation of these recommendations may assist with improving customer outcomes.
While this review and the ABA’s response are steps in the right direction, we note that only one page of the 59 page report focusses on senior executive pay and bonuses.
The review’s terms of reference focussed on pay arrangements for lower level retail banking jobs and meant the reviewer was unable to scrutinise middle and senior executive pay and bonuses, which can have a critical impact on bank culture. As Mr Sedgwick said, “[t]ime did not permit (and the Terms of Reference did not require) comprehensive data gathering about the remuneration arrangements of those more senior than the immediate managers of in-scope retail bank staff.” (page 27)
Despite the banks’ promises to ‘increase transparency and accountability’, many of the submissions banks made to the review are not public. There remains a real lack of customer knowledge about the way banks pay their staff.
Only a Royal Commission can provide the systematic, thorough and transparent investigation that’s needed to stop the rip-offs, poor practices and unfair treatment of customers, and get to the bottom of systemic and cultural issues in the banking and financial services sector.
WEDNESDAY, 19 APRIL 2016