Westpac Group CEO, Brian Hartzer, at a speech to the Australia Israel Chamber of Commerce in Melbourne called for ongoing and significant changes to the way banks work with their customers.
The trust gap.
Having said all that, it is impossible to convince someone of the value you’re adding if they don’t trust you. And we need to recognise, that, as an industry, we have a trust gap.
Trust is at the heart of banking. And trust in banking is like trust in any other relationship: It requires that we treat people fairly and honestly.
As a result of things some bankers have done, or the way banks have responded when things have gone wrong, some people have concluded that banks—and bankers—are only out for themselves.
And banks only have themselves to blame for that.
We need to recognise that at times we have not met the expectations of the community. People are saying things need to change. They do need to change.
The good news is they are changing.
Across the industry we are changing processes and we are changing behaviours.
At Westpac we are going back to basics and reviewing all of our products, policies, and processes, to make sure they are working in our customers’ interests.
I’ll give you one small example.
Last week some of you may have read about a mistake we made with one of our products. We weren’t applying a discount properly on some accounts for younger customers. The fees needed to be manually reversed and in some cases they weren’t. Through our reviews we identified the mistake, reported it to ASIC, refunded the money, and have now put automated systems in place to make sure it won’t happen again. Procedural mistakes like this are not acceptable. And they do nothing to help banks regain trust from people who are already skeptical.
Yes, we found it and fixed it: Part of the Westpac ethos is that if we get it wrong we put things back on track.
But this small example shows the need for constant vigilance and continuous improvement on the part of the banking industry.
We’re also focusing on our culture more broadly, reinforcing our goal of being one of the world’s great service companies.
Let me be clear: I am proud of the 40,000 people who work at the Westpac Group. I know that overwhelmingly they come to work each day wanting to deliver great service and help their customers.
Across the company, complaints have fallen by over 70 per cent in the last four years. Over the past three months we had three times as many compliments as complaints in our branch network. This gives me confidence we are on the right track—but we know we need to do more.
We are putting our financial advisers through ethics training, and are incorporating the principles of the banking oath into our code of conduct for all employees.
We are also changing practices that might be seen as creating potential conflicts of interest.
Through the Australian Bankers’ Association we are working to agree on steps the industry can take to eliminate the perception of conflicts of interest in the way front line staff are paid. An independent expert is reviewing those practices and we will adopt whatever is agreed.
Having said that there are things Westpac can do on our own, and we’re moving ahead.
From next month we’re planning to remove all product related incentives across our 2,000 tellers in the Westpac branch network. Rather, their incentives will be based entirely on customer feedback about the quality of service they received in the branch.
We have also revisited the way we reward specialised sales roles in our network. We will no longer vary reward values based on different products; but rather our people will be rewarded for meeting the full range of our customers’ needs.
This is all part of making sure that when our customers walk into a branch, they don’t have cause to question the quality of service that they’re getting, or the motivation of our people.
At the same time we’re reinforcing standards of behaviour, and enforcing consequences when people fall short.
We’re appointing an independent customer advocate who is empowered to resolve issues for our customers. And who can overturn decisions made by our internal dispute resolution process.
And we’re investing more in our compliance and oversight capabilities, to make sure we can quickly spot and resolve issues when they occur.
We’re also continuing to give back to the community, through our support of the Westpac Rescue helicopters, the Westpac Bicentennial Foundation, which gives a hundred scholarships a year, volunteering leave and matching gifts for staff, and 200 Westpac community grants of $10,000 each this year alone.
It’s part of why the Dow Jones Sustainability Index has just recognised Westpac as the world’s most sustainable bank, for the third year in a row.
And we’ll continue to take action now, Royal Commission or not.
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