The royal banking commission findings shouldn't shock you.

Consumers are given the illusion of choice but rarely have much choice. And the devil is always in the detail.

The recent Royal Banking Commission revealed unethical conduct through our most trusted financial institutions. Some of the conduct included; charging fees to deceased customers, irresponsible lending, insurance products that failed to deliver or were considered to be unsuitable products for consumers to name a few.

Without going into the specifics, no one objects that customers were treated poorly and deserve retribution.

But in a system where winners take it all and more money equates to a higher success level whether that's through bonus, higher status, rewards, a raise, the question isn't 'Why did this happen'? It should really be;

Why should we expect bankers or financial advisers to act any differently?

The whole concept of capitalism was built on the exploitation of some for the benefit of others. It has never been an even keel playing field. Every day Australian borrowers are no exception. They do not set the interest rates, they do not negotiate the terms and conditions of their lending contracts. Nor are they expected to. 

Capitalist bankers are going to act like capitalist bankers. They know how to negotiate their way out of most dilemmas. Like they have done. Especially when ASIC and APRA rarely prosecute in a court of law and the majority of issues were resolved via negotiations.The idea behind regulators is to be the buffer between the consumer and the financial institution but surely a better approach would be for consumers to have more bargaining power in the first place, rather than trying to fix the problem after the wrong doing has occurred. For example, if consumers could effectively choose their own terms and conditions on loans and tweak contracts to suit their needs better, this could prevent the pressure to sign on the dotted line. Consumers are given the illusion of choice but rarely have much choice. And the devil is always in the detail. 

The need for ethics in banking was always there. 

There are certain professions where ethics is sewn into it. Such as Doctors and lawyers. Where there is a fiduciary duty ethics is expected and enforced. Evil Lawyer jokes aside, lawyers are expected to be ethical to their clients, although this may be laughable given that lawyers have a strong history of over charging fees, but chances are if you are a lawyer you are ethical and loyal to your clients or you suffer the consequences. Doctors have a fiduciary duty to their patients or they may suffer the same consequences. 

For a long time Banking has escaped it's ethical duty to customers. Similar to how religion or big corporations escapes taxes. Despite huge consequences of the wrong financial decisions and what is at stake for many households who plunge into debt, it is only recently when Banking Codes of Conducts have been enforceable and legally binding.

Will much change for the big four bank brands even after the Royal Banking Commission? It’s highly doubtful. The banks hold a massive share of the economy, the power is and has always been in their favour.

We know that banks act without ethics. This is nothing new.

We have known this for years. Yet we remain loyal customers because we have no bargaining power or choice. We can only hope going forward that ASIC and APRA act quicker to act and tougher on banks. Or better yet, give consumers more choice around their loans at the start but the banks won’t want to give up any of their bargaining power anytime soon so we must be dreaming.