Month: May 2018

Bankers Association chief executive Karen Scott-Howman said the banks’ revised staff incentive schemes which followed the highly critical Sedgwick Report in Australia last year, indicated banks were committed to “continuous improvement”.

The Bankers’ Association of New Zealand, in a letter it presented to the FMA and Reserve Bank on Tuesday, says banks have been changing their remuneration policies to ensure retail staff no longer receive incentives based directly on sales performance.

Scott-Howman says that lessons can be taken from what’s happened in Australia, and that New Zealand’s regulators are adept enough at asking the right questions without needing a full-scale enquiry.

The Bankers Association said it has responded to regulators in a letter setting out the regulatory and market difference between Australia and New Zealand and said it has current work underway “to maintain public trust and confidence in the New Zealand banking sector.”

“I think our customers should be confident that there is a strong banking culture here. But I totally respect that people want to have evidence of that,” Ms Scott-Howman said.

“The major banks have already made changes to their remuneration policies to ensure retail staff no longer receive incentives based directly on sales performance, or are in the process of doing so,” she said.

Ms Scott-Howman says there are ‘ cultural differences’ between the New Zealand Australian regulatory environments.

“We believe we have a strong banking culture in New Zealand. We fully accept we need to back up that position with proof, and we’re happy to work openly and constructively with our regulators to do that,” said association chief executive Karen Scott-Howman.

“In New Zealand we have very effective regulators, and they’ve asked banks to provide them evidence that there’s no problem and we’re very willing to do that,” Mr McLean said.