It's no secret that public trust in banks is battered and bruised, but recent figures underlined just how hard it may be for banks to win back their reputations.
Only one in three people trust the banking industry, according to figures from the industry's peak body this month. There was a tiny improvement from 31 per cent six months ago to 32 per cent today, but the result is pretty stunning when you think these are businesses entrusted with our savings.
Granted, the same survey showed a higher 56 per cent of us trust our own bank, as opposed to banks in general. People mistrust plenty of other industries too (the media, for one) and the measures of bank customer satisfaction are quite a bit higher still.
But exactly why trust in big institutions has eroded is a topic for another day. The more pressing question for banks is: what might they do to win back their public reputations?
As the banks prepare to face a royal commission, this trust gap has been acknowledged by heavyweights from ANZ Bank chair David Gonski to Reserve Bank governor Philip Lowe, and banks have spent the last 18 months rolling out a six point plan to try to mend things (more on that later).
Obviously there are no simple ways to fix the banks' trust problem, because the industry would have done so if it were so easy.
However, there are clues in what banks have done so far, and action taken by banks overseas, that hint at the types of further changes in behaviour we might see.
First, expect to see more change in how people in finance are paid.
At the heart of so many problems in financial services of recent years have been the incentives offered to staff - whether they are financial advisers being paid commissions, tellers being given sales targets, or executives bonuses weighted towards the short-term.
There has been some progress in addressing this. Financial advisers have been banned from receiving commissions (except when selling life insurance). Banks have reined in or scrapped sales targets for tellers, and emphasised customer satisfaction instead.
But there's clearly more to be done. A report from the Australian Bankers' Association this month said it would take until 2020 for all banks to implement changes to remuneration structures recommended by a powerful review of incentives by former top public servant Stephen Sedgwick.
As just one example, there's likely to be a shake-up in the $2.4 billion a year in commissions paid by banks to mortgage brokers, to remove the incentive to write larger-than-necessary loans.
Banks may also face pressure to change how their top executives are paid (though I wouldn't hold my breath for big cuts in how much they are paid). There has already been a shift towards bonuses that incorporate customer satisfaction, but further moves in this direction could make sense.
How else might banks win back trust? Perhaps by shifting towards simpler products that are less likely to trip up their customers.
Think about how many financial products just happen to exploit some trait in our behaviour, for the banks' benefit. A classic example is the "teaser" interest rates that are attractive for a limited amount of time, before reverting to a much worse deal for the customer, once they have signed up and are unlikely to leave.
In Britain, banks including Royal Bank of Scotland scrapped teaser rates for credit cards and deposit accounts in 2014. Chief executive Ross McEwan said at the time that zero per cent offers on cards could "trap people in debts they cannot afford," and this is a concern among consumer groups here, too.
Domestically, some local banks such ME Bank and ING have also moved away from "teaser rates" on savings accounts and there is a regulatory inquiry looking at zero per cent balance transfer deals. But across the industry, teaser deals are still widespread.
A third, related point is that banks could look at how they reward loyalty. The upshot of "teaser" rates on deposits, or big discounts for new mortgage customers, is that the best deals often go to customers who are prepared to regularly shop around.
McEwan, floated as a potential next chief of the Commonwealth Bank, even said in 2014 he found it "absolutely abhorrent that you would give a new customer a better deal than someone who has been with you for 30 years." Awkwardly for RBS, it is reportedly thinking about backflipping and some bringing teaser rates back in order to compete, but his point still holds.
Even though the banks use these deals to win new business, discriminating between new and old customers sits uncomfortably with all that talk about putting customers first. How many other industries are there where the worst deals can go to the long-term, loyal customers?
It's also worth noting that banks have been rolling out a six-point plan to improve the industry's culture that was announced in 2016. This includes better handling of customer disputes, improved training of staff, protection for whistleblowers, and weeding out bankers who break the rules. These are all worthwhile changes, but surely there is more to come.
The obvious tension with all this is that making big changes to remuneration, or the design of financial products, may come at a commercial cost. But returns should only be part of the picture, and banks say they understand that. ANZ chair David Gonski even said as much last month, when he told shareholders that to rebuild trust, businesses "could not be "solely shareholder-focused organisations".
Ross Gittins is on leave
