“What the relationship between a bank and a business – the impact if can have.
Psychologically, financially, but also in regards to a family” (Listen here)
Newsletter #66 – June 29 2018
The banking Royal Commission this week has heard sad stories of farmers that have been forced off their properties. (Listen Here)
In some cases, illness such as heart attack or cancer did not appear to have slowed the banks’ pursuit of distressed assets.
But there is one line from the often-faltering testimony of ANZ executive Benjamin Steinberg that rang out for me.
It was this: “As a bank we don’t want negative publicity and we try and do everything we can to avoid it.” (Listen here)
Mr Steinberg had admitted the bank, on occasion, acted unethically. He accepted there were times its behaviour fell below community expectations and even breached the Banking Code of Conduct.
But if the ANZ – or any bank for that matter – will do everything they can to avoid negative publicity … does that sometimes preclude doing the right thing by aggrieved customers? Perhaps to seek to silence customers, rather than settle with them? To use their financial or legal power to crush customers, rather than settle with them? To turn their publicity machines against customers, rather than settle with them?
Because at every step you turn in this Royal Commission, you come across an obvious imbalance of power.
Thankfully the legal and story-telling skills of the Royal Commissioner and the Counsel Assisting – doing the cross examination of the bankers – are righting that imbalance and making bank executives accountable.
Mr Steinberg was asked by the Senior Counsel Assisting the Royal Commission Rowena Orr whether adverse publicity against the bank in several cases had an influence on the bank’s subsequent behaviour.
This went to the heart of one case study heard in the Royal Commission, or 84-year old Charlie Phillott whose family has farmed the Carisbrooke Station at Winto in Central Queensland for the past 50 years. (Watch Here)
Mr Phillott, who was forced from his farm during a period of drought – despite never missing a payment on many of his loans – enlisted the aid of Nine’s 60 Minutes program. Reporter Michael Usher and producer Grace Tobin did a great job telling Charlie and his son Charles’ story.
One sequence was to arrive, unannounced – with cameras rolling, to ANZ’s head-office in Melbourne.
Given these days of high-security around bank offices this was a bold step. For example, we are forbidden from setting foot and filming on any bank property, even outside these days. We are restricted to the footpath.
But with cameras rolling and Mr Phillott’s story a compelling one of a family mistreated, the bank did not dare throw the cameras out. This was pretty smart by ANZ’s head of communications Stephen Ries. He knew it would be a bad look.
By coincidence, as Mr Steinberg has given his evidence to the Royal Commission in the past couple of days, Mr Ries has been highly visible on the live-stream of proceedings, directly behind Rowena Orr.
Eventually the bravado of 60 Minutes approach with Charlie paid dividends. The then CEO Mike Smith visited his property – again with the 60 Minutes cameras rolling – had a cup of tea and handed back the property to the Phillott family.
That story – and Smith’s actions – prompted a number of other aggrieved ANZ farming customers to seek similar treatment, and their stories are also being told in the Royal Commission. (Listen here)
But Mr Steinberg’s own testimony rings a deep truth inside the banks. To repeat his line: “As a bank we don’t want negative publicity and we try and do everything we can to avoid it.”
Having had experience in using my position in the media to take consumers’ cases to higher reaches within banks it is sad that it has to come to that for some.
In most cases, there is not even the threat of adverse publicity simply that the matter has reached high enough within the bank that common sense, rather than bureaucracy and rules dictate the decision-making.
The challenge for banks, which over decades have centralised key decision making to head-offices far away from the customers, is to trust those closer to the client to make decisions. But that is difficult in an era of increased regulation and lawyers that create policies designed to protect the banks’ interest.
The irony is – after this Royal Commission has heard countless cases of common-sense being ignored for legalistic or system-driven decision-making – that even more rules and more regulation is likely to be the result of the final recommendations.
Which raises one more question: will customers be better protected as a result of this Royal Commission. Or will we have even more layers to deal with, to get a sensible decision?
I suppose the one thing we know for certain – people have lost trusts in banks. The stories we’ve heard this week, and will continue to hear, of aggressive tactics by the banks on Australian farmers is just more evidence that peoples trust in banks is gone.
One farmer who told her story this week – Wendy Brauer – summed up her experience with her bank “We trusted these people because that’s their business. I recommended these jerks to people.” (Listen Here)
Wendy’s trust, like many other farmers and Australians, is something the banks might never win back.
Why are the big banks selling their wealth planning businesses? – Watch here
Money News –
ASIC launches legal action against AMP for twisting and churning your insurance policies for a higher commission – Listen here
Farmer Michael Hirst appeared before the Royal Commission over how ANZ ‘belted him to bits’ – Listen here
Interviews during the week
Interviewed Denita Wawn, CEO, Master Builders Association titled ” Will tradies be worse off with no company tax cuts? .”
Interviewed Dani Venn, Finalist, Masterchef titled ” Will this women get her money back after hackers stole it? .”
Interviewed Bob Katter, Independent Senator,, titled ” Bob Katter: ‘The government yarded us and the banks butchered us’ .”
Interviewed Matthew Warren, Outgoing CEO, Australian Energy Council titled ” Has the energy game changed in Australia? .”
Interviewed Debbie Viney, Farmer, titled ” Is this how you would expect banks to treat farmers? .”
Interviewed Matt Comyn, CEO, CBA titled ” Why has the CBA severed ties with scandalous wealth management business? .”