Australia’s banks have been told to recruit and promote on the grounds of “wisdom”, “courage” and “morality” to address the fallout of the Royal Commission.
The Hayne Royal Commission has highlighted a series of cultural problems inside Australia’s banking sector, including poorly-designed incentive programs and a failure to prioritise the customer.
But with the final report set to be handed to the government next week, major consulting firm PwC has counselled the banks to think of this as an “opportunity for more rigour” in how they select and evaluate for new hires and promotions.
In a recent report, it said banks should consider shifting their testing towards personality traits rather than “technical skill, knowledge and experience”.
In particular, banks should look for wisdom, courage, morality, resilience and adaptability.
And as technology and artificial intelligence changes the workplace, it’s crucial that banks hire staff with the ability to move through different roles while taking their personal attributes with them.
The five traits will undoubtedly be useful in the wake of the Hayne Commission’s final report.
In the Commission’s interim report, he argued Australia’s financial institutions have sought short term profit at the expense of the “basic standards of honesty”.
“How else is charging continuing advice fees to the dead to be explained?”
A focus on sales rather than service was also identified, as was poorly designed incentive schemes.
PwC said financial rewards should be “more punitive” when staff display undesirable behaviours and actually directed “sensitively” towards those who demonstrate the positive behaviours.
Additionally, rewards should be offered to encourage a culture based on personal attributes. The consulting firm said this would imbue employees with a sense of purpose.
“To retain employees, leaders need to be trained in offering intrinsic [personal] motivation just as much as they are in utilising extrinsic [tangible or financial] motivation,” the report continued.
But, PwC emphasised, all of this is won’t hit the mark unless other cultural drivers like targets, objectives, markers of success and communication modes are also realigned to drive positive behaviours.
“Personal attributes are key.”
Release of report a contentious topic
The final report is due to be released to the government next Friday, 1 February.
Labor shadow treasurer, Chris Bowen is calling on the government to release the report to the public on the same day.
“It is in the national interest for the Australian people and victims of banking scandals to be able to access the Hayne Banking Royal Commission’s final report and form their own views, at the earliest opportunity, and that means on Friday 1 February,” Bowen said on Monday.
“Refusing to release the Royal Commission’s final report immediately would unnecessarily politicise the handling of the report and give rise to potential material market risks around leaks of all or part of the report.”
Parliament is set to resume mid-February, meaning there’s only a small period for legislation around the report’s recommendations to be introduced before the government heads to a May election.
Treasurer Josh Frydenberg said the government looks forward to receiving the report “as we continue to reform the financial sector”.
He hinted to The Australian that the report would be released outside of ASX trading hours, so after 4pm on Friday.
“The government recognises the potential market sensitivity of the final report and will take this into account in considering the timing of its release.”
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