The early skirmishes in Australia’s Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry suggest that banks are not in for an easy time.
The tone was set in March when Rowena Orr QC gave two banks, Commonwealth Bank and National Australia Bank (NAB), a firm dressing down for failing to do their homework properly in the submissions they were required to lodge.
In a tone worthy of the sternest headmistress, she told off NAB for “failing to grapple with the task” it had been set.
The whole thing will be a public relations nightmare for the banks, but where ultimately is it taking us?
The bulk of what’s under scrutiny is at the retail end of town in the name of individual customer protection: bad financial advice, denial of legitimate insurance claims, fee gouging and rewarding staff for selling clients into their own products.
The early days of the inquiry have focused on bonuses that have encouraged inappropriate mortgage sales, with one early revelation being that 15% of NAB’s mortgages carry waivers, meaning they do not comply with all the standards in the bank’s own lending policy.