CBA took too long to change: Narev

Commonwealth Bank’s chief says the group took too long to realise customer expectations had altered.

Commonwealth Bank of Australia CEO Ian Narev speaking at the Trans-Tasman Business Circle lunch in Sydney, Tuesday, Oct. 18, 2016. (AAP Image/Dean Lewins) NO ARCHIVING

Commonwealth Bank chief executive Ian Narev has held his hands up to the accusation that, when it comes to the way banks do business, it took too long to recognise “what was acceptable a number of years ago” no longer is.

Mr Narev on Tuesday said global disaffection at capitalism, worldwide resentment over banks’ role in the global financial crisis, and local concern at the way customers have been treated had all led to people changing their opinion of banks - and their expectations of how they should behave.

“All those aspects have contributed to what we see as a structural shift in community expectations of their banks - what was acceptable a number of years ago, was no longer acceptable,” Mr Narev told a Trans Tasman Business Circle event in Sydney.

“The criticism could justly be made of Commonwealth Bank, and I’ll let other banks speak for themselves, that it took too long to realise that actually realisations have changed.”

Mr Narev said that, while Australia’s banks emerged from the GFC relatively unscathed in comparison to their international rivals, they could not consider themselves guiltless.

“Even though, in Australia, the banking system continued its important support of the economy, there’s no doubt that Australian banks, and I certainly include the Commonwealth Bank among them, let down customers,” Mr Narev said.

The corporate regulator is investigating Commonwealth Bank’s life insurance arm over accusations it acted unethically in rejecting some claims, with CommInsure paying out about $2.5 million since it started reassessing past claims in March.

Regulation of the financial advice industry is also being overhauled following a scandal that engulfed CBA, National Australia Bank, ANZ and Macquarie Group.

New laws governing the education standards and a code of ethics for financial advisers will be brought to parliament before the end of the year, Financial Services Minister Kelly O’Dwyer said this week, Mr Narev said CBA would continue to put right its past wrongs.

“You’ll hear more about remediation and some of the amounts that you’ll hear about will be significant amounts,” Mr Narev said.

AAP