The banking and mortgage industries have welcomed the independent review of commissions and payments made to bank staff, saying it will build trust and increase transparency.

Australia’s largest home loan lender, Commonwealth Bank, has admitted there are “are issues which [the banking sector] need to address”.

“We understand that there are issues which we need to address and we’re committed to keep working hard to ensure we have the right culture and practices in place,” CBA group executive of retail banking services, Matt Comyn, said.

This review was commissioned by the Australian Bankers’ Association (ABA) and is part of a package of initiatives announced to the industry in April this year to lift standards and be more accountable.

The first report regarding the review and how the banking industry is progressing with the new initiatives was released yesterday independent governance expert, Ian McPhee AO. 

The report highlights key milestones which have been met in establishing comprehensive new measures to protect consumer interest, increase transparency and accountability and build trust and confidence in banks.

“The industry reforms we’ve committed to are significant and we’ll work with our peers, regulators and other stakeholders to ensure that we deliver on these commitments,” Comyn said.

“Ultimately however everything comes down to the customer and making sure we’re working to improve the experience they have with Commonwealth Bank.”

Speaking to Your Investment Property's sister publication, Australian Broker, the CEO of Mortgage Choice, John Flavell, said striving for greater transparency should be applauded – on both the broker and banking sides.

“At Mortgage Choice, we thoroughly support both ASIC’s and the ABA’s review into broker remuneration. The objectives of the enquiries should be to deliver better consumer outcomes, and anything that serves to do that and drive greater transparency should be applauded.”

Flavell said he believes both reviews will highlight the “tremendous job” this industry does for consumers.

“There is not another industry that has done as much for Australian consumers as the mortgage broking industry. Prior to the introduction of mortgage broking, Australia had the highest interest rates in the Western world,” he told Australian Broker.

“The emergence of mortgage broking brought with it increased lender competition, smaller bank margins and lower interest rates – all of which was great news for consumers.

“Mortgage brokers also forced Australia’s lenders to become more innovative in terms of home loan products and mortgage features. 

“Today, thanks to the introduction of mortgage broking, Australia boasts one of the most sophisticated mortgage markets in the world both in terms of product innovation and product pricing.”