Australia's Westpac to remove sales incentives for staff

Added 23rd September 2016

One of Australia's big four banks, Westpac Banking Corp, has announced plans to remove all product related incentives from frontline staff in its retail branches as part of efforts to rebuild trust with its customers.

Australia's Westpac to remove sales incentives for staff

Westpac CEO Brian Hartzer

Westpac’s chief executive Brian Hartzer, in a speech on Thursday, said the bank wanted to change practices that could be seen as creating potential conflicts of interest.

“This is all part of making sure that when our customers walk into a branch, they don’t have cause to question the quality of service that they’re getting, or the motivation of our people,” he said.

From next month Westpac will replace its system of rewarding its 2,000 bank tellers for the number of referrals they make to its sales staff with incentives based entirely on customer feedback about the quality of service they received in the branch.

Sales rewards shift

“We have also revisited the way we reward specialised sales roles in our network,” Hartzer said.

“We will no longer vary reward values based on different products; but rather our people will be rewarded for meeting the full range of our customers’ needs.”

"All of financial advisers to go through ethics training."

Westpac also plans to put all of its financial advisers through ethics training courses and has pledged to incorporate the principles of the banking oath into its code of conduct for all employees.

“We’re appointing an independent customer advocate who is empowered to resolve issues for our customers. And who can overturn decisions made by our internal dispute resolution process,” he added.

 “And we’re investing more in our compliance and oversight capabilities, to make sure we can quickly spot and resolve issues when they occur," the Westpac chief executive said.

Banks grilled

Westpac’s move is part of an effort across the banking industry in Australia to counter widespread criticism of their performance which has led to calls for a Royal Commission into their activities.

The chief executives of Australia's four biggest banks will be questioned on their treatment of customers before a parliamentary committee in October after they failed to pass on recent interest rate cuts to mortgage customers.

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Richard Hubbard

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Richard Hubbard is the group editor at Last Word. He is responsible for the editorial content of International Adviser, Portfolio Adviser, Expert Investor and Fund Selector Asia. Richard previously worked for Thomson Reuters and has covered the financial services industry and investment themes from its offices in London, Singapore, Hong Kong and New York. Richard started his career at the Australian Financial Review in Sydney.

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