HRM Issues and Challenges in Australian Banking System

Running Head: IHRM
International HRM (987145)
Report
System04104
5/12/2019

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Table of Contents
1. Introduction...................................................................................................................................2
2. Overview of Australian Banking System........................................................................................2
3. Features of Australian Banks.........................................................................................................3
4. Current Issues and Challenges.......................................................................................................3
5. Political response on Hayne Report...............................................................................................5
5.1 Response of Federal Government and Opposition Federal Government....................................5
5.2 Response of banking Industries on Royal commission................................................................5
5.3 Effect of Recommendation on Employment in banking sector....................................................6
6. HRM issues and Challenges in Australian Banking system for a new manager..............................6
7. Recommendations.........................................................................................................................7
8. Conclusion.....................................................................................................................................7
References.............................................................................................................................................9

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1. Introduction
Australian Banking system is the backbone of Australian financial economy. This
industry is known for its fair practices and reliability of people on Australian banks. The
Australian banking system is consists many small, medium, and large size banks which are
part of Australian banking system. Apart from this, some overseas and international banks are
also operating their banking operations in Australia through locally incorporates subsidiary
branches. However, from last two years Australian banking organisations are facing strong
corruption charges in the country for doing unethical practices and frauds with investors and
their customers. In such circumstance, it is tough for a new foreign bank manager to join
Australian banking organisation from other countries. This report discusses the various
human resources issues and challenges that a new manager will have to face in Australia.
This report also discuss about the Current HR problems and issues in the organisation. In the
last part of this report, some recommendations has been discussed for a new manager that
how he/she can deal with such type of HR challenges and issues in the Australian banking
organisations.
2. Overview of Australian Banking System
Australian banking history is almost two century old. The First Australian bank was ‘New
South Wales Banks’, which was opened in 1817 in Sydney. The second banks were
established in London by the British government in 1847, named Australasia over the name
of Australia (Reserve Bank of Australia, 2018). The name of this bank was further change by
the Australian government and now it is known as ANZ Bank (Australia and New Zealand
Bank). However, in current days the Australian Banking system revolves around big four
banks of Australia, which are Commonwealth Bank (17 million customers), Westpac
Banking Corporation (13 million customers), National Australia Bank (9 million), and ANZ
bank (8 million customers) (Reserve Bank of Australia, 2018). These four banks almost cover
the whole banking industry and all other small banks, financial institutions, mutual banks,
corporate societies, and credit unions are directly or in-directly affected from these four banks
and from their decisions. In present days, the Australian government is focusing on
privatisation of banking organisations because of increasing competition in the banking
sector.

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There are two major bodies in the Australian banking system that regulate and monitor
the Australian banks and their financial operations. These two regulatory bodies are APRA
(The Australian Prudential Regulation Authority) and RBA (Reserve Bank of Australia).
RBA is responsible for monitoring the banking activities and their operations in providing
loans and deposit money of people as an investment, while APRA is responsible for
managing funds of various financial organisations. APRA is currently managing 3.7 trillion
funds of different financial institutions and organisations (APRA, 2019). It also monitors the
fund of Australian people who invest their money in the banks as their savings or in form of
investment.
3. Features of Australian Banks
The major features of Australian banks are as follow:
1. Provide Loans: Australian Banks are responsible for proving loans to the customers.
There are various types of loans that a bank provides to its customers. For example,
personal loans, house loan, car loans, education loans, agriculture loans, business
loans, etc.
2. Insurance products: The Australian banks are also selling various insurance plans to
the people such as health insurance, life insurance, injury insurance, car insurance,
etc.
3. Contribution in Australian Financial system: The Australian banks are backbone
of Australian financial system because the major banks of Australia currently hold
55% of total assets of Australian financial organisations (Reserve Bank of Australia,
2018).
4. Increasing number of Banks: The numbers of banks in Australia are increasing
every day as the numbers of small banks are increasing. Apart from this, some small
credit institutions and financial organisations are also converting themselves in mutual
banks (Landmann & Hess, 2018).
4. Current Issues and Challenges
The Australian banking organisations are currently facing strong corruption charges. The
major banks of Australia were involved in corruption, unethical culture, fraud, briberies,
charging fees for no service etc. However, the Australian governments ordered in last year for