Not all banks and brokers are created equal
We value the relationship with our network of brokers and we value our customers and the trust that they continue to place in us, says Chief Executive Officer Paul Ranson.
Banks have long suffered from a bad reputation. With major financial events like the global financial crisis a not too distant memory, it’s easy to understand why.
Historical banking failures aside, there are other less catastrophic, but just as damaging reasons why banks continue to lose the trust of their communities.
Fast forward to now. We’re in the middle of a banking royal commission because, it seems, that banks have been putting profits before people.
At the time of publishing, 3433 public submissions had been received by the Royal Commission about misconduct in the financial services industry.
The daily news reports alleged dodgy dealings, the existence of liar loans, and unscrupulous broker commissions and more.
For Australia’s banks, brokers are a key distribution channel for their home loan products. According to the Mortgage & Finance Association of Australia (MFAA), 55.7% of all residential home loans were settled by the broker industry in the 2017 September quarter.
It’s no wonder then, that broker commissions have come under the scrutiny of the Commission – with questions being raised such as, are volume-based commissions creating a conflict between customers and brokers interests and leading to irresponsible lending?
Yet, not all banks, and not all brokers, are created equal.
When acted upon responsibly, the broker/customer/bank relationship can be a win for all involved. But from the outside, it can be hard to separate the responsible Banks and brokers from those that don’t do the right thing.
Are we any different from any other bank?
Well, yes, we are. We’re a customer owned bank. In fact, we’re Tasmania’s only customer owned bank. We exist for our customers and without sounding like a cliché, we are putting people before profits and not the other way around. In the absence of shareholders, any profits are re-invested to benefit our customers. It means we can offer better products, services and more competitive rates.
What about brokers and their responsibilities to act fairly? Brokers, too, are bound by regulation. Australian Securities and Investments Commission (ASIC) and their own Australian Credit Licences are there to protect the customer.
Like all banks, we have a responsibility under our Australian Credit Licence to lend responsibly. When a broker recommends a Bank of us home loan to a customer, it’s also our responsibility to make sure it’s the right product for them and if it isn’t, we’re working with our brokers to find one that is. It’s a shared responsibility, that we take very seriously.
The findings of the royal commission will continue to come out, with an interim report scheduled for the end of September this year. When it’s all said and done, integrity is not just a word that forms part of our corporate values – we live and breathe it, it’s there, in all that we do and all that we say. We value the relationship with our network of brokers and we value our customers and the trust that they continue to place in us.