ANZ CEO Shayne Elliott has revealed that the major bank has halved its network of introducers but has no immediate plans to disband the program in light of NAB’s decision.
In his appearance before the House of Representatives’ standing committee on economics, ANZ CEO Shayne Elliott was questioned over the bank’s home loan introducer program.
The program involves the payment of an upfront commission of 30 basis points of the value of a home loan to referrers from the professional services industry or from a community organisation.
Home loan introducer programs (or referral programs) have recently been placed under public scrutiny in light of concerns over perceived conflicts of interest, which may not serve the best interests of borrowers.
In the final report of the banking royal commission, commissioner Kenneth Hayne said that introducers are “more clearly the face of the lender than the borrower”, adding that they “must only act within the confines of their prescribed role”.
Commissioner Hayne added: “Entities must have systems in place to ensure that introducers do not exceed this role. And entities should not regard the role of the introducer as modifying their own responsible lending obligations.”
Mr Elliott told Labor MP and deputy chair of the committee Matt Thistlethwaite that ANZ has reviewed and revised its program amid such scrutiny.
“We’ve halved the number of introducers that we’ve had over the last few years,” the ANZ CEO said.
“We’ve tightened up the governance of that program because there have obviously been a few serious questions around the potential for conflicts and other things.”
However, Mr Elliott said that ANZ is “not actively” pursuing plans to disband its program, despite NAB’s recent announcement that it will end its introducer payments program from 1 October 2019.
“We’ve tightened up the governance of it; we’ve halved the number of people that are accredited with us for introductions,” he said. “We’ve tightened up the processes around monitoring that.”
Mr Elliott added: “We believe there are conflicts in any channel that we use, whether it’s brokers or others. It’s about the degree to which we can manage those conflicts.
“We believe we’ve got a good process in place, [and] we think a lot is achieved through transparency.”
He concluded: “Customers who are referred are under no illusions that they’re being referred to ANZ because of that relationship and that we will be paying that person for the introduction if it’s successful.”