Banking Services have expanded significantly from the early days to now including much more than taking deposits and lending out money. Several years ago, the banking industry vertically integrated into financial planning and other financial services businesses. It is this vertical integration that is now the cause of concern and is central to the Royal Commission into Financial Services in their business. This segment of their business has historically been the most profitable considering that the customer acquisition costs are zero as they cross market to existing customers. These products are generally sold on and advice for a fee model as well as commissions inbuilt. The issue regulators see is that banks tend to sell their own products to customers and customers might not be fully aware that they are not getting a comparison. Of course, the counterfactual argument is that if you walk into BMW to buy a car you don’t expect to be offered an Audi.

There are times, that financial institutions have not managed this conflict of interest and their clients continue to foot a bill without fully knowing what they’re getting in exchange. This has been going on for decades and in the twenty-first century, clients now know better.

There have been a large number of complaints from clients claiming to have been deceived into purchasing services, which are either purposefully misinterpreted or are not fulfilled at all. Australia’s banking leaders have finally succumbed to public pressure after years of constant demand for action against Australia’s financial sector. The Royal Commission Australia public enquiry was established to look into evidences of fraud, deceit and corruption in banks, insurers and other financial institutions.

Since its establishment in December 2017, the Royal Commission has investigated large banks and insurers. Numerous scandals have come about with their investigations and hearings within the first quarter of 2018:

• AMP’s Anthony Raegan confessed that in their internal practice, they have been charging clients with fees that have not been returned in services. They have also continually misled Australian Securities and Investments Commission [ASIC] when this malpractice gets investigated.

• There have been evidences of Commonwealth Bank financial advisers profiting off deceased clients by charging their clients for years after their death, even when they have been made aware of their client’s demise.

• After being grilled about the audits reporting that 5% of advice provided to clients was not in their client’s best interest, Kylie Rixon who is the Chief risk officer of ANZ's digital and wealth arms has also admitted that the system they have for financial advisers was not well-structured.

• National Australia Bank uses its Introducer Program as a front to take cash from “introducers” for customers who could not afford loans. An NAB document from January 2016 also states that there were instances when bankers forged documents and accepted cash from “introducers”.

• The head of the Dover Dealer group collapsed with a medical condition while giving evidence at the inquiry highlighting the stress that all participants are under

In hopes of hastening the regulation of the entire financial sector, ASIC has been given more power by the Australian government in order to carry out the enquiry thoroughly. Without a complete review, they have authority to obtain all the information that they require to bring cases into a hearing.

The Royal Commission Australia plans to resume holding hearings throughout the year 2018 in hopes of uncovering most, if not all, cases of deceit within the financial sector including smaller factions like the

The payday loan market that is within Australia’s financial sector. However, ASIC has been able to monitor this faction more closely than banks due to the smaller size of the market. The enquiry initially did have plans on including the Payday Loan Market in its investigations but since its commencement, the enquiry still mainly focuses on investigating banks and financial planning institutions.