Bank chief executives may be in Canberra as early as next month to face a government-dominated committee which wants to show the new scrutiny will lead to real change.
Scandals in financial planning and some areas of lending have turned banking practices into a key political issue.
Soon, parliament's House Economics Committee will begin direct scrutiny of the financial institutions in annual hearings.
The banks survived a call by Labor for a royal commission, and, instead, the Government announced the committee examination, to be chaired by Sydney MP David Coleman.
He says he understands the public concern.
"Obviously, there have been some very concerning activities in the sector in recent times, and it's perfectly understandable that consumers are concerned. There's been inquiries into issues about the conduct of financial planning, for instance. This is not a one-off thing. This is a permanent change to the oversight of banks."
Labor continues to argue a royal commission is needed, but it will sit on the committee.
The Opposition's spokesman on the issue, Matt Thistlethwaite, says Australians have simply lost faith in the banking and financial sector.
"I will be asking members of the community the questions they want me to put to banking executives when they do appear before us, and we'll be trying to uncover some of those unethical behaviours, some of their practices in terms of their business structures, whether or not they are meeting their duty of care."
David Coleman, the committee chairman, says prudential regulation, compensation for customers and widening competition will all be under examination.
"The fact is that, while we do have a significant number of banking operators in Australia, the overwhelming majority of the industry market share is held by the four big banks, and I do think that looking at ways competition can be maximised for consumers is a very appropriate thing for the committee to be considering."
It will be a new environment for the banks and their executives, but the sector is getting prepared for it.
Australian Bankers' Association chief executive Steven Munchenberg says all involved should focus on the real issues, not just the politics.
"We don't like creating so much political attention. We are concerned some of that could be counterproductive. I mean, some of the attacks that have been on the industry potentially undermine confidence in the industry, and it's not a good thing. Having a strong banking industry is actually one of the reasons Australia did so well through the financial crisis. So attacking confidence in the banking sector is not something one should do lightly."
The committee has yet to meet and set hearing dates.
