The major bank has pledged to fast-track the process of implementing recommendations from the Sedgwick review published in April 2017.
Speaking at the American Chamber of Commerce last week, Westpac Group CEO Brian Hartzer said that the bank will not wait for changes to be imposed on it by the banking royal commission.
Rather, it said that it would fully implement the recommendations that emerged from the year-long Sedgwick review (such as the suggestion for banks to remove volume-based incentives and “soft dollar” payments for its employees) two years ahead of schedule in an accelerated effort to address the “trust gap”, according to the CEO.
Mr Hartzer said that one of the factors that has contributed to this trust gap is “the perception that some of the incentives for our people, or third parties, have been structured in a way that put the interests of the bank and its shareholders before the interests of customers”.
He added that regardless of whether the conflicts of interest are perceived or real, it’s important to reduce tensions wherever possible.
As such, from October, incentives for Westpac’s customer-facing employees will be “further weighted towards providing great service and doing the right thing, rather than product sales”, the CEO said.
“This builds on steps we took two years ago as the first bank to remove sales incentives for tellers and to de-link increases in base pay from product sales,” Mr Hartzer added.
The CEO also admitted that the case studies that came to light during royal commission hearings have been “very confronting”, adding that some issues “took too long to fix”.
“The area where we’ve clearly fallen short — as highlighted by the royal commission — is in responding to vulnerable customers,” Mr Hartzer said.
As such, Westpac will be “more proactive” in identifying customers who might be vulnerable or at-risk and connect them with the right decision makers to address issues “before they escalate further”.
One step towards better handling customer grievances, according to Mr Hartzer, has been the appointment of a new group executive, Carolyn McCann, who will oversee all customer complaints and their resolution across the Westpac Group.
Mr Hartzer noted that the bank has reached the point where “less than 0.3 [of a percentage point] of customers complain in a year”, which he added is “still too many”.
Westpac will also use artificial intelligence (AI) to “listen” to the “thousands” of customer calls that the bank receives every day “to pick up on issues that require immediate action”, the CEO said.
He didn’t touch on the potential privacy and security implications of using AI to automatically monitor phone calls in his address, but he mentioned that the bank is also looking to make it easier for customers to provide feedback or raise concerns on its website.
Mr Hartzer said that Westpac is additionally setting up a dedicated contact centre team to support its Aboriginal and Torres Strait Islander customers, taking into consideration the unique challenges faced by these customers including identity verification.
During the fourth round of royal commission hearings, Nathan Boyle from the Australian Securities and Investment Commission’s Indigenous Outreach Program provided statements on this matter, saying: “Sometimes we see financial services [entities] have policies about the types of questions that are asked and they can only ask questions in a certain way, which might not make sense to an Aboriginal person in a remote community.”
Mr Boyle explained that a question like “what number is on the front of your house” would make more sense to people living in remote communities than “what is your street address”.
The complexity of Westpac’s products, processes, systems and compliance requirements is also something that the major bank wants to address, with Mr Hartzer noting last week (26 July) that changes aimed at improving a service or providing new customer protections have inadvertently resulted in making banking “more complex, opaque or error-prone”.
“These [changes] have led to long, hard-to-understand disclosure documents, legacy products sitting alongside new products with different terms, fees and conditions; and forcing customers to follow different processes depending on whether they visit a branch, mobile app or broker,” the CEO said.
He admitted that complexities have resulted in errors such as over-charging fees and failing to deliver on the services that customers paid for.
As such, the bank launched an initiative called “Get it Right, Put it Right”, under which it has reviewed more than 320 products and made more than 150 changes, including more than halving the number of consumer products on offer and decreasing duplicate statement fees, Mr Hartzer said.
Westpac has reportedly invested “billions of dollars” in updating its technology in a bid to improve reliability and to better service customers in the future.
“Of course, the fundamental responsibility for getting things right for customers rests with our employees,” Mr Hartzer said.
“We’re reinforcing to everyone who works at the bank that if they breach the high standards we’ve set, it won’t be tolerated, and they will face consequences — which have been clearly outlined in a new group consequence management framework.”
Tas Bindi is the features editor for The Adviser magazine.
Prior to joining Momentum Media, Tas wrote for business and technology titles such as ZDNet, TechRepublic, Startup Daily, and Dynamic Business.
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