Financial Services Blog

In early 2017 the Australian Banking Association decided to introduce a new Banking Code of Practice (BCOP), partly in effort to prevent a Royal Commission into alleged misconduct in financial services. This effort failed: the Hayne Commission was launched in late 2017. Now, with Australian Securities and Investments Commission (ASIC) approving the new BCOP in July 2018 (to come into effect next July) banks will have to abide both by the Commission’s findings and the new code of practice.1

At the same time, of course, commercial pressures to deliver “hyper-relevant” services across a variety of digital channels – or risk losing customers to more nimble fintech upstarts – have never been greater. As our research shows, 30 percent of Australian banking consumers are “Nomads” (worth up to AU$2 trillion): tech-savvy, adventurous types willing to shop around for financial services outside banks if supermarkets, social media platforms or other online providers give them a better customer experience.

The upshot of these twin pressures is an increase in costs, as banks are forced on the one hand to hire more staff in compliance functions, and on the other to overhaul legacy systems and deliver a seamless customer experience across multiple channels. Often, these investments in compliance and improving customer experience are treated separately. But there’s no reason why they shouldn’t be considered together.

Why conduct is key

Fundamentally it’s about employee conduct. If banks maintain impeccable conduct from their employees across the board, getting it right in one area can deliver results in the other. After all, employee conduct is a big part of what delivers a good customer experience – whether in person, on the phone or online. At the same time, having good conduct means compliance procedures are followed and controls enforced.

The pressure on conduct is expected to get more intense with the new BCOP (and, presumably, with whatever the Royal Commission recommends when it issues its final report next February). Key clauses of the new code focus on culture drivers: integrity, empathy, capability and accessibility. All areas which, if addressed, can lead to across-the-board improvements in both compliance and customer experience.

Box: BCOP Conduct Focus Summary

Source: Accenture Analysis based upon publicly available documents

One effect should be a shift in culture from an emphasis on sales, which has been blamed for misconduct, to customer service. Some banks have already taken the initiative: ANZ (Australia and New Zealand Banking Group Limited) in New Zealand, for instance, has decided to stop giving front-line staff sales targets, incentivising them instead on issues like good customer service and product knowledge (Part 2 of this series will look in more detail at improving customer experience.)

Rationalising investments

The implication of these changes is that rather than making separate investments in customer experience, conduct risk and regulatory projects, banks can pool their investments and improve all three aspects for a fraction of the cost. Customers could transact faster while compliance teams would be more certain they wouldn’t run into problems down the road.

There are some obvious efficiencies: for instance, the same data set used for enhancing customer experience can often be used to monitor conduct risk and maintain compliance, most obviously in processes like customer onboarding. Onerous onboarding is a key reason for high customer churn, while collecting and verifying the right data is crucial for compliance reasons – so streamlining one benefits the other.

Moreover, where controls are shared for operations and compliance, any changes to process, technology or skills in the capture and analysis of customer data can be done in tandem both for customer experience and monitoring compliance risk.

The answer lies partly in taking a holistic management approach and targeting conduct across the board, rather than seeing customer interactions and compliance as siloed or compartmentalised issues to tackle sequentially. And, of course, it’s crucial to find the right technology to realise the efficiencies of such an approach.

This sounds simple in theory but of course implementation is the hard part. In our next blog on the series we’ll look in more detail at how changes banks put into place as a result of the BCOP, and other regulatory strictures, can have a genuine impact on customer experience.

For more information on the Banking Code of Practice, read our point of view: “Ensuring Seaworthiness to Chart a Course: How Australian Banking can survive the perfect storm”.

Contributors to this post: Jennifer Pham, Manager, Management Consulting, Accenture; Rimon Nissan, Manager, Management Consulting, Accenture


  1. “18-223MR ASIC approves the Banking Code of Practice,” Australian Securities & Investments Commission, July 31, 2018. Access at:

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