Banks are taking action on conflicted payments to staff because the industry realised it was not living up to the community's expectations and this could tarnish corporate reputations, says Bank of Bendigo and Adelaide chief executive Mike Hirst.

As banks launch a review of commissions to sales staff, Mr Hirst, who is also deputy chairman of the Australian Bankers' Association said he came to the view more than a decade ago that paying commissions and volume-based payments to financial planners could compromise "good customer outcomes".