Banks struggling on bad apple register
Bad apple bank employees are unlikely to be the subject of an industry register any time soon but, in the interim, the Australian Banker's Association (ABA) is looking at the development of a "Conduct Background Check" protocol similar to that applied to financial planners.
Amid the establishment of the Australian Securities and Investments Commission's (ASIC) adviser register and in the wake of the Financial Planning Association's (FPA's) Conduct Review Commission expelling a member for dishonest conduct, the ABA's latest independent governance expert report has revealed the banking industry struggling to deal with similar issues.
According to the report author, Ian Macphee, "the development of an industry register, as a mechanism to improve recruitment practices and decisions in the banking industry, is one of the more difficult measures to implement given the legal issues involved".
"The industry is mindful of the need to balance varying stakeholder interests, including promoting fair treatment of employees, addressing concerns with misconduct, and fostering good conduct and ethical behaviour," his report said.
"As the ABA has advanced its consultations with stakeholders on the design principles for the industry register and the register's implementation, it has determined that a possible approach to manage the legal and privacy issues is the development of a statutory register," the report said.
"If this is confirmed as the preferred approach, the implementation of such a register will be contingent on legislative and/or issue regulatory support which introduces an external dependency to the effective establishment of such a register, and its key role in achieving the objective of this initiative."
It said that, on this basis, the implementation period would likely be outside of the timeframe originally proposed for this initiative.
"With this in mind, the ABA was progressing the development of a Conduct Background Check Protocol for bank employees, and had settled the design principles with banks and other stakeholders.
"This protocol builds on the principles of the Reference Checking and Information Sharing Protocol for financial advisers," the report said.
It said the ABA envisaged that the Conduct Background Check Protocol would be adopted in a staged approach after its approval, with the major banks expected to adopt the protocol by 30 June 2017, while the smaller banks were expected to adopt the protocol by 30 September 2017.
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