Bank advertising escapes criticism in the financial services royal commission

Australia’s advertisers have escaped widespread criticism in the financial services royal commission’s final report.

Justice Haynes’ report blasted the industry’s culture of sales and profits at all costs, but restricted criticism of the sector’s advertising to car dealers, lenders preying on vulnerable consumers and superannuation marketing.

One of the few marketing-related aspects of the report was a recommendation that the superannuation and insurance sectors should be banned from ‘hawking’ their products.

Another aspect was car dealers should be bought under the National Consumer Credit Protection act, something that may affect the sector’s marketing given dealers’ dependence on offering credit.

The report overall was far less scathing on the industry than widely expected and bank stocks surged following the report’s release. By lunch, Westpac had jumped 7.9% followed by the ANZ with 7.2%, NAB’s 5.0% and CBA’s 4.9%.

Despite the stock market’s enthusiasm, the work Australia’s banks have to do to regain the public trust has been highlighted by Brand Finance’s global Banking 500 report.

In its report, Brand Finance found the value of ANZ’s brand against its peer had fallen 20.2% in US dollar terms, while Westpac had taken a 10% hit, CBA dropped 7.9% and the NAB 4.5%.

The figures differ from Brand Finance’s Australian report released last month due to currency fluctuations.

While the news was relatively good for banks, the process of rebuilding the sector’s reputation may not be simple. At the 2017 Mumbrella Finance Marketing summit, the head of the Australian Bankers’ Association, Anna Bligh, warned the industry’s trust issues can’t solved simply by corporate communications.

“You can’t comms your way out of a problem as big as the trust issue facing Australian banks at the moment,” Bligh told the conference. “There has to be real consistent and focused effort around culture and conduct and there has to be significant investment in new technology that will make the customer experience as good as it can be.”

Four months after Bligh made that statement, the Australian Bankers Association launched a campaign portraying the sector as the friend of mum and dad investors.


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