Time to get professional

NAB chief executive Ross McEwan. Picture: AAP

Lifting standards isn’t just front and centre at National Australia Bank, with the banking regulator and industry body quietly manoeuvring behind the scenes to find ways to boost professionalism.

It’s been a long time coming for the embattled banking industry after the disturbing revelations of the 2018 Hayne royal commission. Ethics and professionalism are now a bigger focus.

It was NAB that came out all guns blazing with a new staff education program this week, mandating all 34,000 employees complete at least a base module covering topics such as ethics and conduct.

The program — in partnership with the Financial Services Institute of Australasia (FINSIA) — also includes further education modules, and comes at a cost of $50m over the first three years.

NAB chief executive Ross McEwan is looking to get out in front on the education and standards theme, perhaps because the bank was tired of waiting for a proposed industry-wide solution.

It’s an area the Australian Prudential Regulation Authority is interested in, particularly after the damning self-assessments banks conducted on their governance and culture mostly after the royal commission.

This column understands APRA was consulting with parts of the banking industry early this year on a new tool being developed to “benchmark and assess trends in risk culture”, basing its work on that undertaken by the UK Banking Standards Board.

APRA wants to use data analytics to compare results to a benchmark, and gauge whether positive change is occurring.

With the COVID-19 turmoil putting that preliminary work on ice, though, it seems this will be a long-term project.

Individual banks have also raised their investment in governance, training and embedding professionalism, as well as making it more rigorous, but only time will tell which approach yields results.

Getting all the banks on the same page on an industry-wide standard may be too big a task unless a regulator is involved.

On the plus side, an industry-wide approach would mean employees switching jobs would have transferrable certifications.

How education programs are best provided, monitored and policed is also up for debate.

That includes the issue in NAB’s case of FINSIA being the provider, revenue recipient, and also signing off on accreditation for employees. There is a potential conflict there, and what happens if existing employees fail any assessment?

NAB’s step is a good one to get the topic on the radar and signal to staff this is a top agenda item, but the implementation process will be key.

The Australian Banking Association has also been active in looking at ways to boost professional standards. It is working with the Institute for Ethics, Governance and Law — which counts institutions including Griffith University and the Australian National University among its ranks — on a research paper delving into the issues.

ABA chief Anna Bligh said work around how to lift professionalism and ethics in banking had been continuing after the royal commission, but the industry was still sorting out the best way to achieve the goal.

“There has been discussion about what sort of model might work … it is important to do this thoroughly and carefully and get it right,” she said.

“Every bank is also doing a lot of work within their organisation.”

In this columnist’s opinion the industry and APRA must expedite and enact solid professional standards as COVID-19 risks recede. And for McEwan and his team the test will be to get the NAB program to work and ensure measurement of its results.

Back to work?

Banks are joining the rush of companies doing a deep dive into office space requirements after the COVID-19 disruption.

McEwan said staff productivity had been “very good”, despite the bulk of the bank’s 34,000 employees working from home. While he plans to maintain NAB’s existing office space for some time, Mc­Ewan admitted the bank was thinking about what it would look like in two years’ time.

Given restrictions in NAB’s home state of Victoria, it is moving to return about 15 per cent of its NSW workforce to the office next week. That follows an assessment of which staff wanted to return and the roles NAB required.

“We are going to try some different things that will work for our colleagues, many of whom actually still want to work from home,” McEwan said.

A recent survey of NAB staff found that 80 per cent wanted the flexibility to work remotely.

AMP’s advocate

AMP has changed the reporting structure of its customer advocate function, which reviews complaints and is separate to its customer compensation program.

The advocate now reports into group general counsel David Cullen rather than the head of risk.

The change was part of internal restructures earlier this year, and provides more collaboration on cases that may need legal input. An AMP spokesman said there was no change to the role of the customer advocate in reviewing escalated complaints.

AMP’s remediation program has been in the spotlight after revelations former customer Adam Check is still battling the company, even though the regulator slapped his former financial adviser with a four-year ban in 2018.

There were also separate allegations about an AMP adviser cutting and pasting signatures into loan contracts.

The AMP board met several weeks ago for a discussion on remediation. Cullen will take a more active role in the matters.