In response to the release of the Australian Bankers’ Association Retail Banking Remuneration Review (the Sedgwick Review), Gerard Brody, CEO of Consumer Action Law Centre said:
“This report represents an important first step in overhauling the aggressive sales-culture that has come to dominate our retail banking sector. The independent reviewer, Mr Steve Sedgwick, found that the sales culture was ‘deep-seated’, so it’s good news that the banks have agreed to implement the recommendations aimed at eliminating sales-centric reward and recognition schemes that pervade our banks”.
“Importantly, the report identified that this was not just a problem relating to tellers and sales staff, but rather the culture of banks including at senior levels. It is welcome that the banks have embraced change, but the true test of their commitment lies in the implementation. Actions speak louder than words—the proposed review in three years will be crucial for determining just how successful the banks have been in moving from a sales-culture to a truly service-focused culture”.
“The report also recommended abolishing behind-the-scenes payments and benefits to mortgage brokers that lead to aggressive home loan sales. The recent report by ASIC made it clear the damage that can be caused – loans made by brokers are 25% more likely to go into arrears. At a time of record household debt and in the midst of an historic housing affordability crisis, regulators and politicians have been pushing for more accountability in home lending. We shouldn’t rely on the banks alone for change here, the Federal Government needs to act on commissions and conflicted payments so that we have an effective industry-wide response”.