Implosion of banking trust
Banks will need to change the way they look and act on all fronts if they are to regain trust from the community, the Australian Bankers’ Association (ABA) believes.
The ABA’s new chief executive, Anna Bligh, said the country was seeing the largest transfer of power from institutions to consumers in history and that consumers were not going to give that power back.
“It is not enough to have a banking system that is the envy of the world, you also need to enjoy the trust and respect of the broader public. Erosion of trust leads to erosion of strength,” she said.
“Australians have lost trust in banks’ ability to balance the interests of customers and shareholders. Politicians and regulators have responded to this erosion with an unprecedented level of scrutiny.”
Bligh cited an Edelman survey that said there was an implosion of trust worldwide with banks and was due to the belief that mainstream institutions failed to protect consumers from the impacts of globalisation and technology change.
“A strong banking sector is critical to Australia’s economic prosperity – especially when our economy is in transition – but it needs to operate in a way that meets community expectations,” Bligh said.
She noted that her immediate priorities for the banking sector were:
- How to accelerate reforms without compromising care and rigour;
- Looking at which reforms to prioritise to deliver tangible benefits to customers;
- How to translate the massive reform agenda to a cynical and distrustful public; and
- How to measure success.
“None of us can afford for the banking industry to give up on its goal of winning back trust, as this will be integral to all sectors in the new environment we all operate in,” she said.
Recommended for you
Results are out for the latest sitting of the ASIC financial advice exam, with the pass rate falling for the second consecutive sitting.
Adviser losses for the end of June have come in 143 per cent higher than the same period last year, and bring the total June loss to over 350.
ASIC’s enforcement action is having an active start to the new financial year, banning a former Queensland financial adviser for 10 years in relation to fees for no service conduct.
ASIC has confirmed the industry funding levy for the 2024–25 financial year, and how much licensees can expect to pay.
