Mr HOGAN: Can I ask that question again. You do not believe, historically, that your bank, even pre your time, had the balance wrong between flogging product and providing service?
Mr Narev : I have no doubt there have been individuals or even teams of individuals over time—
Mr HOGAN: Do you believe that that happened because of the structures and the KPIs management put in place?
Mr Narev : I think the work that is being done now as part of the Sedgwick review is very important and—
Mr HOGAN: Do you believe that those structures that were put in place by management created those problems?
Mr Narev : I know enough to know that we should watch the recommendations of the Sedgwick review very carefully and listen to an independent view as to whether there is any link between incentives and customer outcomes which ought to change and, if so, we will change them.
Mr HOGAN: Personally, I think that is a really disappointing response. People on this committee have said you do not have to go far in the community to have people tell you of a disappointment they have had with a bank. That is understandable—there are lots of employees, there are lots of customers. I have immediate family members who have told me that, who have worked in branches for decades and said, ‘It changed and the change was negative for the experience of the customer and the experience of staff because it went from being a service culture to a sales culture.’ The fact is you are saying to me that you need to wait for a review. You could say now: ‘Look, I think we did. I think the banks got the balance wrong for a while and we did try and flog product at the expense of service in trying to get the whole balance scorecard right.’ The fact that you cannot say that, I personally find very disappointing.
Mr Narev : I understand the point. What I am saying, and I think we agree, is that as we look at what the banking system needs to do to maximise the trust it has from the community, we would be naÃ¯ve to believe that looking at incentives should not be an important part of that. We are doing the work and we are open to making the necessary changes. I think that that kind of constructive attitude is probably more important than the view as to what historically might have happened and when. What we are saying here is that we are open to the view that changes in incentives will improve outcomes for customers and, if that is the case, we will make the changes.
Mr HOGAN: I hear that. In my experience and from the people I speak to, including bank employees, I know people will tell you categorically that the system where the KPI measurements were changed was to the detriment of the customer. The fact that you cannot say that bluntly and that you are awaiting for reviews and stuff, I personally find disappointing.