A Senate committee will examine the impact misconduct in the banking sector is having on consumers.
Labor won the backing of the Senate on Tuesday to establish the inquiry, which was opposed by the government.
Due to report back in 2018, the inquiry will look into executive pay and incentive-based commissions and their impact on banking, financial services and insurance consumers.
Consumer group Choice welcomed it as a chance to shine a light on anti-consumer practices in the banking system.
"Sunlight is the best disinfectant," Choice spokesperson Eric Turner said.
"From consumers being pressured to take out unaffordable home loans to people who are still picking up the pieces after receiving dodgy financial advice, this inquiry will look at all the ways the financial sector can leave people in financial ruin."
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