Paying bank staff to help you

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.

Banks are implementing all of the recommendations to make banking better for customers.

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

The ABA response to the final report is available here.

Mr Ian McPhee is independently overseeing this initiative as part of the governance of industry reforms announced in April 2016.