Union praises ANZ’s bonus changes
First Union, which represents 1000 ANZ Bank New Zealand staff, says the bank's move to cut frontline retail sales incentives is a "major move in the right direction", though changes from other banks may be some time away.
This morning, ANZ announced plans to get rid of the sales targets - which can account for up to 25 percent of staff bonuses - by Oct. 1. The bank has trialled no-sales targets in parts of its call centre this year and that has been successful, it said.
ANZ changed staff incentives last year to a mix of customer feedback, service, product knowledge and sales, with about 75 percent of incentives coming from non-sales targets, but was still concerned sales targets might cause retail staff to sell products that don’t meet customers’ needs, ANZ’s managing director retail and business banking Antonia Watson said in a statement.
"Removing sales targets altogether will give our customers total confidence that we’re focused on doing the right thing by them," Watson said. "The environment is clearly changing and the feedback we’re getting and what we’re seeing in Australia suggests this is the right approach, regardless of how direct or indirect our sales targets were or how minimal." An ANZ spokesperson confirmed the New Zealand bank does not have team sales targets, and has no plans to introduce them.
In Australia, the Royal Commission of inquiry into misconduct in the financial services sector is ongoing. Five major banks - AMP, Australia & New Zealand Banking Group, Commonwealth Bank of Australia, National Australia Bank and Westpac Banking Corp - have so far paid back A$222.3 million for fees they charged customers for services which were never provided.
ANZ in Australia last month accepted enforceable undertakings from the Australian Securities and Investments Commission to stop selling superannuation products as part of in-branch customer reviews, and to pay A$1.25 million to a nominated organisation, on top of the undertaking agreed in April where the bank agreed to pay A$3 million after ASIC found ANZ had failed to provide documented annual reviews to more than 10,000 customers between 2006 and 2013.
First Union national finance sector organiser Stephen Parry said the removal of sales targets and sales pressure was the main point of discussion in recent collective bargaining negotiations the union had with ANZ.
"First Union applauds both the bank and the union members who have been pushing for this change for years," Parry said. "ANZ has now set the bar ― we hope that the other banks will now do the right thing and step up to the plate. Customers and regulators are demanding more ethical business practices from the banks, now is the time for the other banks to fall into line."
Parry said workers at ANZ and the other major banks have been raising the issue of inappropriate sales pressure "for years, if not decades".
None of the banks contacted by BusinessDesk - ASB Bank, Bank of New Zealand, Kiwibank and Westpac - said they would definitely remove sales incentives.
ASB said its frontline staff "are incentivised across a number of measures" and it has made changes to its performance management framework over the past year, such as removing individual sales targets for staff last month, and has more changes ahead.
Kiwibank said it has also been reviewing performance targets for its frontline people, and its incentives are "generally much more modest compared to other banks", and wants to continue to strengthen its culture of "doing right by our customers ... in a number of ways."
Westpac said it has "already made changes to the way frontline staff are incentivised and indicated further changes are in the pipeline. We will be talking to employees, union representatives and other stakeholders and will make announcements in due course, with any changes taking effect from Oct. 1 2018."
Westpac also referenced Stephen Sedgwick’s year-long review into the retail banking sector in Australia - released in April 2017 - as it said it will have the recommendations from the report "fully implemented across our network by 2020, and are continuing to review our structures to ensure the right outcomes for our customers."
A BNZ spokesperson said the bank is currently reviewing all its incentives schemes and performance frameworks.
"We are working closely with our staff as part of this review and while the outcomes are yet to be determined BNZ has no further comment to make."