ANZ removes sales incentives

Wednesday, 8 August 2018

ANZ said it was important that customers got the right product for them, not because a staff member felt pressure to sell it.

ANZ is removing sales targets for its bank staff.

Managing director retail and business banking Antonia Watson said frontline staff currently had a 'balanced scorecard' approach to determine their incentives.

About 25 per cent of bonuses given are based on sales.

But from October, that would become zero. Instead, incentives would rely on things such as the quality of customer service and product knowledge staff offered.

A trial of no sales targets in the bank's call centre had worked well, she said.

Watson said there was some concern that sales targets might cause retail staff to sell products that don't meet customers' needs.

'We trust our staff to do the right thing by our customers and we know they consider customers' genuine needs when they talk with them. Removing sales targets altogether will give our customers total confidence that we're focused on doing the right thing by them.

'The environment is clearly changing and the feedback we're getting and what we're seeing in Australia suggests this is the right approach, regardless of how direct or indirect our sales targets were or how minimal.'

She said it was important all customers who had ANZ New Zealand financial products had them for the right reasons and not because any staff member felt pressured to sell them to meet any targets.

'We want our customers to know they can depend on us to do the right thing for them and that this is the absolute focus of our employees.'

The change only applies to staff, not to mortgage brokers, investment or insurance advisers distributing the bank's products.

Australia's Royal Commission of Inquiry into Misconduct in the Banking, Superannuation and Financial Services sectors found widespread problems, including that 5 per cent of ANZ customers got financial advice that was unsuitable.

Banking expert Claire Matthews, of Massey University, said it was likely other banks would follow ANZ's example.

'It is a response to concerns across the sector about sales incentives. Legislative change around financial advice may also encourage a changed approach. To be successful and encouraged the bank still needs to be getting an appropriate level of sales and generating the required level of profit. If they can do that without specific sales targets, it makes sense to do so.'

First Union has been campaigning for a change.

Its finance sector organiser, Stephen Parry, said a toxic sales culture was rife in the New Zealand banking sector, and he was pleased to see that ANZ has signalled a major move in the right direction by removing sales targets.

'Union members at ANZ and the other major banks have for years, if not decades, been raising the issue of inappropriate sales pressure. This pressure is about much more than whether or not a worker receives a bonus payment ― it's about a day-to-day culture where sales come first and service comes second, and where workers risk disciplinary action if they do not meet their targets.'

He said the union had finished a round of collective bargaining negotiations with ANZ where the removal of sales targets and sales pressure was the main point of discussion.

'On top of today's announcement, we are also in the process of taking out an offer to members which includes a ban on performance management around sales, and a commitment from ANZ to move away from a sales-based culture to one based on ethical behaviour and customer service'.