In a recent survey conducted by the Finance Sector Union about banking practices there was one very clear message that came back from both bank workers and customers: Australian banking isn’t good enough.
Customers are tired of excessive fees, charges, declining customer service and constantly being sold more debt. Workers are tired of being pressured to sell more debt, being unable to deliver the kind of service they would like to, and watching their bosses get paid big bonuses for risky banking behaviour.
We need to address this problem. We need to improve regulation of Australian banking.
International leaders at the G20 are debating improving regulation of the banking sector to avoid another Global Financial Crisis. However, international talks can drag on, and just like Copenhagen there is no guarantee they will even come to an agreement. In the mean time customers and workers are bearing the brunt of bad banking practices.
Australia can be a leader in this area by acting now to better regulate banks and deliver the better services and security that customers and their own staff want.
In the Better Banking Charter launched by the Finance Sector Union and to be endorsed by union delegates today we are calling for regulatory reform in 5 key areas:
- Commitment from Government and banks to stop offshoring jobs and invest in developing skills in the Australian financial sector
Supported by 90% of the public and 93% of workers, this measure will ensure that jobs stay here in Australia, and neither customers or workers have to deal with the frustration and delays of trying to get answers out of offshore banking units. This will also eliminate the very significant privacy concern of customer’s most sensitive financial information being sent overseas.
- Government regulation to prohibit or significantly limit the extent to which performance can be measured by sales volumes linked to selling debt products in the finance sector.
Supported by 79% of the public and 90% of workers, this measure will remove an enormous amount of pressure on bank workers who are forced to sell debt products even to people who don’t want them, help to stop the spiraling problem of personal debt levels getting out of control, and allow bank workers to concentrate on giving customers the better service that they want.
- Government regulation to require banks to reflect interest rate movements set by the Reserve Bank
Supported by 80% of the public and 79% of workers, this measure will stop profiteering by Australian banks by not allowing them to increase interest rates more than they should, helping Australians to better manage their debt, and protecting the vulnerable from being ripped off.
- Government regulation to prohibit the bonus culture that rewards risky short-term behaviour by executives in the finance sector
Supported by 90% of the public and 89% of workers, this measure will help reduce the very risky behavior that puts the financial security of our banks into jeopardy and directly led to the global financial crisis, as well as even out the huge disparity between workers salaries and executive salaries.
- Regulatory requirement for banks to demonstrate a direct link between their fees and charges and customer service provision
Supported by 82% of both the public and workers, this measure will stop the excessive and at times unexplained fees that customers are charged for using their own money. The reduction or constraining of excessive fees will save Australians money and stop the enormous contribution that fees make to the increasing levels of personal debt.
These 5 important areas in the Better Banking Charter do not cover all of the issues in Australian banking, but are an excellent start.
The Finance Sector Union will be lobbying the Australian Government to take up the Better Banking Charter. In particular, we will be asking them not wait for the G20 negotiations, but to move now to better regulate Australian banking in the interests of all Australians.
The public can show their support for the Better Banking Charter as well at www.better-banking.org/take_action
Wendy Streets, FSU Acting National Secretary
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