A Dummies Guide To The Banking Royal Commission

We've tallied up the worst offenders, the casualties thus far and who else's head is on the chopping block -- as Australia braces for the commission's first banking report card.

For many millennials, their introduction to banking was a Dollarmite account in primary school (remember those? They were yellow envelopes and if you got a gold coin to deposit, you'd be the envy of all your povo mates who only got 50 cents?)

But, if your financial know-how hasn't developed much since then -- don't worry -- ten daily has your back. We're going to explain what the deal is with this Royal Banking Commission. Apparently it's going to expose ‘banking bastardry’, according to Professor David Kinley from Sydney Law School.

Emily may well now be one of the thousands of CBA customers who paid for advice they never got. IMAGE: Supplied

The Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry was announced on 30 November 2017.

It covers consumer lending, financial advice, loans to small businesses and issues affecting farmers and indigenous Australians as well as superannuation and insurance.

The independent commission has also been asked to consider if sufficient mechanisms are in place to compensate victims.


Former Prime Minister Malcolm Turnbull appointed the Hon Kenneth Hayne AC QC as Commissioner and it started in mid December 2017.

It's worth noting that this only kicked off after years of pressure from whistleblowers, consumer groups, the Greens, Labor, and some Nationals MPs.

IMAGE: Supplied

The 'big four' banks -- Commonwealth Bank, Westpac, ANZ, National Australia Bank -- are in the spotlight, but they aren't the only ones being examined.

To date, there have been more than 100 witnesses, almost 10 000 submission across six rounds of hearings


Commissioner Kenneth Hayne is set to make bruising observations on the way the financial services sector does business, given a truck load of evidence that, in many cases, customers have taken a distant second place to the interests of shareholders.

It’s not just poor financial advice that’s affected bank customers. The poor advice has combined with potentially illegal behaviour by bank employees.


AMP's chief executive officer Craig Meller was the commission's first high-profile casualty. He suddenly quit following revelations the company lied to the corporate watchdog ASIC for almost a decade to cover its practice of charging customers fees for advice that was never delivered.

The resignations so far -- and more are expected. IMAGE: supplied

The resignation was accompanied by an unreserved apology from AMP to its customers. Soon after, AMP chair Catherine Brenner also resigned.

National Australia Bank senior executive Andrew Hagger was also casualty of the banking royal commission -- and left the bank after 10 years.

The Commonwealth Bank also earned the title "gold medallist" of charging customers for financial advice they never received.

Banking regulator APRA also called out the culture of Australia's biggest bank, the CBA, after allegations that it broke anti-money laundering and counter-terrorism financing law more than 50,0000 times.

CBA agreed to pay $700 million to end the litigation over breaches of anti-money laundering and counter-terrorism financing laws.

This is by far the biggest fine in Australian corporate history.


The royal commission has said the interim report will be limited to the first four rounds of hearings: consumer credit, financial advice, lending to small and medium-sized enterprises and experiences with regional and remote communities. It's expected to be released on Friday (but not the most recent hearings on superannuation and insurance.)

Banks, insurance companies and wealth managers are bracing for the release of the interim report.

The banking regulators (ASIC and APRA) may be criticised for their handling of misconduct, but may also get recommendations for enhanced powers.


Mr Hayne is expected to recommend, either in his interim or final report, that major financial institutions be prosecuted for charging customers fees for no service. The final royal commission report is due February 2019.

Australia's big banks, superannuation funds, wealth managers and insurers are now facing massive and enforced changes to their culture, management and conduct.

It is now becoming obvious that the Royal Commission is likely to produce a massive outbreak of criminal and civil litigation.

Banks will have to do more to verify customers' incomes and their actual living expenses, rather than relying on the widespread use of benchmark expenditure measures.

ASIC has already secured hundreds of millions of dollars in refunds for customers charged fees for advice they did not receive and expects compensation across the industry to top $1 billion.

And that's just the tip of the of the cashed-up iceberg.

READ MORE: AMP Chairwoman Catherine Brenner Resigns In Wake Of Banking Royal Commission

READ MORE: The Most Damning Allegations Of The Banking Royal Commission Explained

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