Australia’s Parliament Questions Big Banks

australia-bank-inquiry

On 3 October 2016 a Parliamentary Committee Inquiry, set up by the Liberal Party as a counter to a Labor call for a Royal Commission, began to question all four CEOs of the Big Four Banks (Westpac, ANZ, NAB, Commonwealth), on separate days. Was this a genuine effort to change banking culture or a political box-ticking exercise? Our Australia Correspondent, Malcolm Sealy, discusses the issue.


The responses by these Chief Executives were very similar overall – the most significant statements were that they felt that had become too distant from their customers many of whom had been victims of incentive selling of unsuitable products.  One admitted that there had been a fundamental failure of leadership.  Apologies were offered willingly and it became clear that considerable sums – running into millions – had been re-imbursed to customers.

They have subsequently agreed to the establishment of a Tribunal to examine individual complaints in the future.

At the conclusion, after expressing  many apologies for past mistakes to all and sundry, the Bankers returned to their ivory towers leaving things much as they were.  The Parliamentary Inquiry was reminiscent of throwing a hand grenade into a swamp.

However, on the following day, a significant comment was made by the head of NAB during a media conference in Queensland.  He touched on a global banking problem deriving from the de-humanising effect of technology by saying

“We have lost touch with our customers….as Banks have got bigger….things like technology and the digital world have enabled so much more non-personal, non-human contact.  I think senior people have become less in contact with the real world.”

Visits to the Bank in person are rare events for most people with internet banking by smart phones and less use of cash with the advent of the ‘wave and go’ Credit Card.

Therefore, the rather parochial Inquiry in Canberra has brought to light this global issue – almost by chance.  By extension, one can see similarities with the Self-Service systems in large Retail/Grocery chains – less human interaction and so less personal service which leads to loss of consideration and care for the individuals which make up the society on which the business depends.

Which brings us to Juvenal and Kant = quis custodiet quis custodes – all the Banks have Governance Principles and documents in place on their websites.  But, during all the interviews no mention of the word Governance was made nor how poorly it had been used.  Culture is popular but not clearly defined – culture without constraint is not tenable.

The Governance statements seem to cover and go through the motions but they look lifeless – as though they said “Well we have done our Governance exercise, now we can get on as usual and forget about it – what a relief.”

Banks and customers are composed of human beings and so let’s refer to Immanuel Kant – more difficult to read and understand than Governance Principles – whose most important Categorical Imperative was that man should be seen as an end in himself and not a means to an end. 

Unfortunately the Australian Bankers have not read Kant as this Inquiry seems to reveal that they have treated the clients as means to an end – just to improve the profit – and lost their concern and humanity.


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