Bank boss, Anna Bligh, says ag bankers must earn right to be trusted

Yet, while bank bashing may now be our national sport, our banks also did plenty of good work in the community.

They had also moved fast in recent months to beef up their capacity to deal with customer complaints and concerns, and ditch policies which brought them national scorn and humiliation during last year’s banking Royal Commission.

“The reality is, however, nobody wants to hear about the good things until we act on the Royal Commission recommendations and start earning the right to to talk about those good things,” Ms Bligh said.

“Trust arrives on foot and leaves on horseback,” she told the Farm Writers Association of NSW.

“The community is telling banks there must be consequences for their actions - people want to see it now because not enough has happened in the past.”

While many bankers, from regional branch staff to senior city executives, were greatly disappointed last year’s 68 days of public hearings by Justice Kenneth Hayne ignored many positive banking roles and contributions, particularly in rural communities, Ms Bligh said the spotlight on the financial sector highlighted how “you only  get credit for the good you do if you minimise what’s going wrong on the other side of the coin”.

“I don’t think any Australians believe nothing will ever go go wrong in the banking sector again, but they want to see the industry respond now, and to tidy up quickly when things do go wrong in future”.

She said banks had behaved their way into a big distrust problem and now had to behave their way out.

“As someone who has had experience with numerous crisis in my life, I know that a powerful and important change can come out of a crisis like this.”

The ABA regarded the Royal Commission report on misconduct in the banking, superannuation and financial services industry “as a way to make a major paradigm shift in our industry”.

“When you are treated really well by a business you think of far better of that business than normal,” Ms Bligh said.  

“I see a lot of determination and resources going into increasing complaint management processes and compliance as banks learn to confront and deal with the bad experiences of the past year.

“There’s a lot of activity focused on giving people a fairer hearing.

“Some of the most powerful outcomes from the Royal Commission were not written down in the recommendations, and that includes the impact on bank staff internally.”

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Addressing a host of agribanking issues, the bank lobby’s chief executive officer touched on topics varying from Australia’s surprisingly poor and fragmented farm debt mediation processes, through to the lending sector’s eagerness to grow its farm loan book despite the inherent  riskiness and increasing market and seasonal challenges facing farm lenders.

She conceded the level and depth of agricultural expertise and experience across the banking sector was “probably a different challenge and a different sized challenge to different banks”.

Responding to an observation that inadequate knowledge and empathy for the complex ag sector had probably led to many of the toxic farm customer experiences aired in the Royal Commission, Ms Bligh said banks now had no choice but to prove they were increasing their experience levels.

“It’s going to be a bigger issue for some to deal with than others, but they all have a work program established by the Royal Commission and they will all be accountable to demonstrate what they should be doing,” she said.

“They know they will face specific questioning from a House of Representatives inquiry.”  

Specialist understanding of the industry and a long term view were also basic characteristics required to service agribusiness with the money it badly needed to grow.

A "hot topic" now facing agribusiness bankers in the wake of the Royal Commission and tightening overseas finance markets was their capacity to lend across the diverse spectrum of potential agricultural borrowers.

"A number of bank CEOs and senior staff say the have a very strong appetite for lending to small business, including agriculture, but it's inevitable in some parts of the ag sector its a much higher risk arrangement than a residential loan," she said.

"But this is a sector banks appreciate and want to grow in.

"It will always be an area of lending that needs specialist lending attention, expertise and a long term view of returns, but it's one banks want to continue in."