Paying bank staff to help you

Remuneration Update

Mr Sedgwick has completed his interim review into the progress of banks on the implementation of his original 2017 recommendations.

Mr Sedgwick published his report on 12 March 2019. His media release is available here.

Background

In April 2017 an independent review was completed into how banks pay staff or third parties for selling retail banking products like mortgages, credit cards and deposit accounts.

Led by former Australian Public Service Commissioner Mr Stephen Sedgwick AO, the review looked at whether commissions, bonuses or other incentives might mean that the interests of bank staff are not aligned with the interests of their customers. Mr Sedgwick made 21 recommendations in his final report, including that retail bank staff and managers no longer receive incentives based directly or solely on sales performance. Mr Sedgwick also issued an issues paper in January 2017.

The ABA response to the final report is available here.

The outcomes of the review has helped banks develop new overarching principles on how they pay and incentivise all executives and employees.

Since 2017, banks are continuing to implement all of the recommendations to make banking better for customers.

The industry has proactively undertaken to report progress on the implementation of the Mr Sedgwick’s recommendations publicly.

Initially, Mr Ian McPhee independently oversaw the implementation of Mr Sedgwick’s recommendations as part of the governance of industry reforms announced in April 2016. Mr McPhee’s final report was issued in April 2018.