The chief executive officers from the National Australia Bank and Westpac have apologised to their customers during the parliamentary inquiry into the banking sector.
The National Australia Bank has told the banking inquiry that the profession is based on 'trust, respect and integrity', while acknowledging past failures.
NAB chief executive Andrew Thorburn has struggled to explain to a parliamentary committee why no senior executives lost their jobs after misconduct by financial planners was discovered.
The financial planning scandal saw 43 NAB planners leave the company between 2010 and 2015 due to misconduct, 41 of whom were dismissed.
"I think that is important, that we are constantly looking for issues and we're addressing them and compensating customers."
But it wasn't until Labor’s deputy committee chair, Matt Thistlethwaite, grilled the bank boss on five financial planners who were banned by corporate regulator Australian Securities and Investment Commission that Mr Thorburn offered a public apology to NAB's customers.
"I've met with a number of them and when I read and hear the stories I'm extremely disappointed," Mr Thorburn said.
"I have apologised to the customers, particularly in the financial advise part of the business."
He told the House of Representatives economics committee a breakdown in "trust" and "confidence" had taken place.
'I have apologised and do so again.'
NAB said it now spends more time trying to understand why customers are struggling to pay off loans and helping them to get back on track - rather than just recovering its money.
Mr Thorburn also explained how loan rates were set, conceding the bank company had never made clear why mortgages and other loans weren't directly linked to changes in the Reserve Bank cash rate.
"We have not been clear enough that our mortgage and other lending products are not and have never been directly linked to the cash rate," he said.
"To our customers, I acknowledge that we have not always delivered as well as we could or should have. We must do better."
Westpac boss 'working to close trust gap'
Westpac CEO Brian Hartzer, the fourth and final executive to face the federal parliamentary inquiry, said the banking industry now faces a "trust gap".
"Westpac isn't perfect, in recent years we've had operational errors and we apologise for those," he said.
"It's clear that a trust gap has opened up, and we as an industry and as individual banks need to work harder to close that gap."
The bank noted it had lost 22 financial planners in the last five years.
"What happens in some of those cases is that when an investigation is kicked off they quickly resign," Mr Hartzer said.
Mr Hartzer also spoke about the proposed establishment of a banking tribunal and questioned what the benefit would be to customers.
"We already have a lot of regulation and regulation hasn't necessarily saved consumers."
The Westpac boss said the prospect of a tribunal was raised to bank chiefs earlier this year by Prime Minister Malcolm Turnbull and Treasurer Scott Morrison.
"I don't have a strong view on whether the right answer is a tribunal per se or something else."
Mr Hartzer suggested that if customers have been falling through the cracks then perhaps the appeal process should be simplified.
"If the answer is a tribunal, so be it but we would simply say, 'let's just not add another layer'."
The recent High Court decision to uphold ANZ's right to charge late payment fees up to $35 was raised in the final 15 minutes of the committee.
Liberal MP Craig Kelly asked the Westpac CEO if his bank was likely to raise fees in light of the ANZ fees being ruled lawful.
"We understand fees are an emotive issue for people and we try to balance it up to make sure that fees are reasonable, but also that we cover our costs," Mr Hartzer said.
The bank says it made a decision several years ago to bring fees down and it is unlikely it would raise them in the near future.
"The last thing we're going to do is think about how we [can] put fees up higher than $35."