The Australian Bankers’ Association has launched an industry-wide reference checking protocol that is aimed at weeding out ‘bad apples’.
The ABA has announced a new protocol to be used by banks when recruiting employees that aims to “crack down” on misconduct in the sector.
Released by the ABA last week, The Banking Industry Conduct Background Check Protocol introduces "new hiring measures agreed by Australia’s banks to crack down on individuals with a history of misconduct".
The new protocol means banks will be able to request information from former employers on whether an employee has been dismissed or has resigned as a result of misconduct, or if an investigation is to be carried out on that employee.
The protocol will apply broadly across banks – covering their executives and other employees – and will be implemented no later than 1 July 2017 by major banks and 1 October 2017 by non-major banks.
ABA chief executive Anna Bligh said, "Banks recognise they need to do more to stop individuals with poor conduct records moving around the banking industry from one job to the next escaping detection."
The ABA said the new hiring protocol has been designed to complement the Financial Adviser Reference Checking & Information Sharing Protocol, introduced earlier this year.
Speaking at a banking ethics conference last week, ASIC deputy chair Peter Kell commented on self regulation in the banking sector, saying that 99 per cent of the Australian community does not trust banks to self-regulate and have become cynical about the new measures being introduced.
"There is still a perception that some of these codes and other things are window dressing," Mr Kell said.
"The community has become cynical about some of these measure because they don't see the consequences or accountability when the standards, which can be quite good standards, are not met.
"This is a sector, where perhaps more than others, you have a proliferation of different bodies and industry associations that at times operate primarily as lobby groups rather than groups aimed at raising standards – so there's a perception issue around that."