It’s no surprise a bank left the ‘i’ out of responsibility
In printing 46 million new $50 notes, the Reserve Bank of Australia ironically left the ‘i’ out of responsibility, writes Xavier Symons. Ironic because massive, faceless financial institutions tend to lack a sense of personal responsibility.
The Reserve Bank of Australia is one of the country’s most important financial institutions, bearing responsibility for interest rates, currency circulation, and other crucial aspects of Australian monetary policy.
It doesn’t inspire confidence, then, to hear that the RBA has printed 46 million new $50 notes, only to discover that there is a spelling mistake in the micro print featured on the note. Ironically, the misspelled word is none other than “responsibility”, from which the third “i” has been omitted.
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The error was part of a printed quote from the maiden speech of Australia’s first female politician, Edith Cowan, to the WA parliament in 1921.
Typographical errors on bank notes are apparently very rare, and you would think that a bank — out of anyone — would always remember to read the fine print. Even still, there is something unsurprising about a bank leaving the “i” out of responsibility.
A sense of personal responsibility, after all, is something that easily lost in the context of a massive, faceless financial institutions.
The unfortunate truth is that, leaving aside the RBA’s trivial mistake, a lack of accountability was at the heart of some of the most wilful instances of misconduct exposed by the Hayne Financial Services Royal Commission.
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The banking royal commission opened, for example, with explosive evidence of National Australia Bank branch managers accepting white envelopes stuffed with cash as part of an alleged bribery ring. The commission heard that bankers sold loans based on fake documents to “smash” their sales targets.
Five bankers were sacked in November 2015 over the scandal. But 60 bankers across various financial institutions were allegedly involved in varied levels of misconduct related to the program, including falsified loan documents, dishonestly putting customers’ signatures on forms and the provision of unsuitable loans.
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Subsequent to the release of the Commission’s findings, the major commercial banks have reformed the way they sell mortgages and charge service fees. In the case of ANZ, they’ve even appointed a new board and CEO.
Yet the CEOs who presided over some of the worst misconduct have in some cases escaped unscathed.
Those who have been forced to resign have received significant payouts, and will face no further disciplinary action.
Former NAB CEO Andrew Thorburn received a $1 million golden payout plus leave entitlements when he resigned in February — and all this after it was discovered that NAB was charging dead customers hundreds of thousands of dollars in fees and charging financial advice fees for no service.
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Apparently Thorburn did not even want to resign, and had to be forced to do so by the company’s board.
Chris Kelaher, chief executive of embattled financial services giant IOOF, has announced that he will leave his role in July — with a payout of $1.3 million. Kelaher has been subject to sustained criticism after the Royal Commission revealed that IOOF had paid compensation to its superannuation members out of their own retirement savings.
There is even a sense in which banking executives are unwilling to acknowledge the deception and injustices that have occurred.
Since the release of the Royal Commission’s findings, executives have talked at length about the need to manage “non-financial risk”.
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Former APRA deputy chair Ian Laughlin, for example, has released a report entitled Social Risks for a Financial Services Business — a document that discusses the “risks that come from changing social attitudes and norms, and the power of new social capabilities” and encourages banks to appoint “social risk officers” to manage heightened public expectations.
And on Wednesday, Westpac chairman Lindsay Maxsted told attendees of a superannuation investors’ annual conference in Melbourne that “there had to be a much, much greater focus [in the sector] on non-financial risk, on conduct risk as a subset of that, and on compliance”.
But what does risk really mean? Is it just a euphemism for gross misconduct, deception and manifestly unfair practices?
It’s not just that banks made a miscalculated the risks involved in charging dead people hundreds of thousands of dollars in fees — they did the wrong thing and they need to acknowledge it.
It’s only when banks stop talking about risks and start talking about responsibility that things will change.
Until then, don’t forget to read the fine print when you’re banking.
Because sadly, you still can’t count on banks to get responsibility right.
Xavier Symons is a research associate at the Institute for Ethics and Society, University of Notre Dame Australia.
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