The major bank, which sold its advice business to IOOF in 2017 but assumed liability in the deal for historical remediation, told a public hearing of the House economics committee on Friday that it was currently employing more than 1,000 staff to work on remediation.
ANZ chief executive Shayne Elliott refuted questioning from committee deputy chair Andrew Leigh around the bank employing consultants “to see how you could make the payments slower”, saying it was in ANZ’s interest to remediate customers as quickly as possible.
“We have no interest in slowing down payments, it’s not in our interest to make those payments slower – in fact it comes at a considerable cost,” Mr Elliott said.
“We have over 1,000 people at ANZ working on remediation, our shareholders have already taken the accounting hit and it’s in our interest to get it behind us.”
The comments come following ASIC’s appearance at the same committee last month, during which the regulator’s deputy chair Karen Chester called out delays with the big four banks’ remediation programs and suggested too many of their financial resources were going towards the payment of external consultants.
“We are seeing green shoots in terms of the culture within some large institutions, but we will be consulting around what our expectations are for remediation programs going forward, focusing on things like transparency and how many cents in the dollar is going through to the consumer versus paying consultants,” Ms Chester said at the time.
Mr Elliott said the bank currently employed 10 consultants to advise on remediation processes and expected to reduce this number in the near future.
“At last look we had 10 consultants, and by the end of September that will be reduced further. Certainly we’re not doing that to slow it down, we’re doing it to speed it up,” he said.
“It’s complicated because you are going back to an individual’s account from five, seven, 10 years ago and you need to get all the data. We didn’t have the same systems and tools then, so you have to run through the entire 10-year history and recreate the account as if the right level of fees applied.
“That has to be done name by name, so sadly we are having to [remediate] millions of customers and we are getting it done as early as we can.”
ASIC estimated to the committee in August that $2.99 billion was still to be refunded across the big four banks as a result of poor advice or fees for no service.
However, Mr Elliott said ANZ was determined not to rush through the process and risk making further costly errors.
“The last thing we want to be doing, and we saw this in the royal commission, if banks act quickly and don’t do things properly it can end up a real mess,” he said.
“The amount of money we are getting back to customers is starting to increase at a geometric rate and that will continue.”
This remediation program is a crazy job and from everything that I have seen and heard, the big four banks want this drain on their reputation gone ASAP. It is a mixture of legacy systems and the latest reinterpretation of the FoFA requirements that is causing this much trouble.
They have for practical purposes unlimited money here and want to get it over with as soon as possible. If they can’t do it then it is impossible. Other large licensees who want to remain product providers are in a different boat – they either give up or grow big so they can say to ASIC “You want us to do the same crazy level of remediation? Well we dare you to shut us down as we don’t have a million dollars per adviser.”
The reason it’s taking so long is because they never really started. I know advisers who received request for clients files/info only this year, from some of the Banks. On one hand they’ve told ASIC one thing, that they’ll review files over a 7 year period, way back when all this first surfaced in 2015…. but because they’ve taken so long to contact advisers it’s now a 10 year period and longer for some poor advisers. ANZ are threatening these small businesses saying if you don’t give us the info from 10 years ago we’ll send your name to ASIC. Tell ANZ to rack off it’s far too late.In reality client files are in the digital dust bin. If you can get some advisers to speak it would be a great bank bashing story. You can google this yourself but ANZ is telling ASIC one thing and in practice they’re doing another.