A Helping Hand with Hardship from Australian Banks

Steven Münchenberg, CEO, Australian Bankers’ Association, talks about the banking industry’s financial hardship package to help bank customers who are experiencing temporary financial difficulties.

If you’ve got money worries, would you tell your bank? It’s a question a number of Australians face each year.

There can be all sorts of reasons why any of us can find ourselves in a situation where we struggle to keep up with our mortgage, credit card or other loan repayments. Unexpected unemployment, reduced working hours, getting sick or helping a sick partner which means we can’t work, or relationship breakdown, are common causes. If this happens, the pressure, stress and debts can grow quickly. Even though we want to be back in a position where we can make those repayments, it can be hard to see a way out of our troubles.

In these circumstances, talking to your bank might not be the most obvious thing to do. In fact, many people feel they should hide their troubles from their bank, in case the bank makes things worse.

But actually, banks want to help, and for very good reason. We know that if we stand by our customers in difficult times, the vast majority of them can get back on their feet and go back to being good, loyal customers. We also have a responsibility to our customers not to be just ‘fair weather friends’, only interested in them in the good times.

Some recent research by the banking industry worries us though. We found that only one in four Australians know that banks have hardship programs in place to help customers who get into financial difficulty. Most Australians, therefore, don’t know that help is at hand if they need it. Consumer and welfare groups have also told us that awareness is low, information too hard to find and that banks can be inconsistent in their approach.

In response, the banking industry has recently released a suite of measures designed to raise awareness about hardship assistance offered by banks and to make it easier for customers experiencing financial difficulties to talk to their bank about what help is available. We’ve also issued industry guidance to get greater uniformity in our approach, while keeping the flexibility necessary to tailor our support to individual customers’ needs.

Some of the measures are simple, but can make a big difference. Banks have agreed to put a new button on their website homepages, so that with one click customers can get straight to information about how hardship support works and who to talk to at their bank. Banks have also committed to putting more information in branches, such as posters, displays or brochures; to remind people that help is available should they need it. Banks will also make sure their frontline staff is well trained to help customers in need.

The banking industry also has a dedicated website at www.doingittough.info with a wide range of information on ways to manage your finances if you’re feeling under pressure.

We hope these measures will not only show we want to help customers, but will also make it easier for people with money worries to get the information they need and to get in touch easily with the right people in their bank to help them. And we know that for most people, that help gets them back on their feet. In the last 12 months, banks have helped over 135,000 Australians and their families get through temporary financial difficulties.

But we recognise that some customers may still feel nervous about discussing their concerns with their bank. If customers do, they should call 1800 007 007 to speak to a free and independent financial counsellor. Financial counsellors can provide people with a range of information, support and advocacy if they’re facing financial difficulty. You should certainly talk to your bank or a financial counsellor before considering expensive debt consolidation or management services.

The banking industry knows that it’s in the interests of both the banks and customers to help people who are facing financial difficulty. With these new measures in place, more Australians will be able to get help from their bank to get through any difficult times.

Written By Steven Münchenberg, CEO, Australian Bankers’ Association