The Commonwealth Bank’s CEO admits it has failed to prevent misconduct or learn from its mistakes, throwing money at customers as it jumps from one scandal to another without properly fixing the problems.
Matt Comyn accepts customers have been hurt, after the financial services royal commissioner blamed the pursuit of short-term profit over people for widespread misconduct in the industry.
Warned the royal commission did not want to hear any more apologies, Mr Comyn did not utter the word sorry but appeared contrite as he became the first CEO to face the inquiry’s final hearing.
He admitted Australia’s largest bank has been complacent and has not prioritised customers’ interests.
Consciously or unconsciously, it has led to decisions that have resulted in financial gain at customers’ expense, he said.
Mr Comyn said the bank has been unable to prevent misconduct and immediately identify, resolve and remediate misconduct when it occurred.
It has been caught in an escalating cycle of funding remediation, resolution and rectification rather than prevention and simplification of systems and processes.
“We seemed to be caught reacting, responding, remediation, in an ever-increasing cycle of that without actually truly understanding the root cause, making the appropriate investments to actually prevent issues from recurring,” Mr Comyn said on Monday.
CBA lost sight of its relationships with customers and its obligations to them, which Mr Comyn put down to a culture of not learning from past misconduct issues.
“Ultimately that’s why I say we get into a period of ongoing remediation without actually fundamentally understanding the root cause in each of those matters and making demonstrable steps to ensure they don’t recur.”
In addition to issues raised at the royal commission, CBA has paid a $700 million penalty for breaching anti-money laundering and counter-terrorism funding laws.
The banking regulator has also slammed the bank for being complacent and blinded to threats in its business as profits rolled in.
Mr Comyn said CBA’s staff felt embarrassed and disappointed in its senior executives and board after the confronting report.
A compliance head called out the bank for paying more attention to the “voice of finance” than that of risk, which which Mr Comyn agreed was an indictment of its culture.
He said the bank’s relationships with regulators have been problematic, and it has been defensive and legalistic in its dealings with them.
CBA’s chairman Catherine Livingstone will also be grilled at the hearing, after Mr Comyn completes his evidence on Tuesday.