Royal Commissioner Kenneth Hayne was tough in his critique of financial services staff remuneration, but The Australian Banking Association (ABA) has welcomed a new report by former public service Commissioner, Stephen Sedgwick, that said banks are on track to meet their 2020 deadline to overhaul staff pay.
In April 2017 last year, banks pledged to change the way banks pay and reward their retail staff, including no longer paying retail bank staff bonuses based on sales, and refocussing workplace culture and leadership structure to ensure a focus on the customer is paramount.
Sedgwick’s report, which was commissioned by the ABA, found banks had significantly reduced the use of bonuses based on financial incentives for front line staff and bonuses for bank tellers were now generally based on broader customer service measures, with ‘sales based’ measures greatly reduced.
Salaries for other bank staff were not greatly weighted towards fixed pay, rather than variable bonuses, and banks were retraining front line staff to encourage a ‘customer first’ approach.
The CEO of the ABA, Anna Bligh, said the report showed banks were on the front foot in implementing the reforms to bank staff pay, with many ahead of schedule.
“Bonuses for bank staff are better balanced, focussing on what’s best for the customer and excellent service rather than simply sales targets,” she said.