Commonwealth Bank's Wrongdoings Based on Royal Banking Commission Report

Running head: MARKETING SYSTEM
Marketing System
Name of the Student
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Commonwealth Bank
It is noted that Commonwealth Bank of Australia is fundamentally known as an
Australian multinational bank with several businesses across New Zealand, Asia, US and
UK. The banking organization is known for its large variety of financial services with the
inclusion of retail, businesses and institutional banking, funds management, insurance, etc.
Furthermore, Commonwealth Bank is known to be the largest Australian listed company as
per Australian Security Exchange.
Description of the Royal Banking Commission
The Royal Banking Commission is also known as Banking Royal Commission which
is also known as royal commission. Royal Banking Commission was developed in 2017 on
14th December by Australian Government as per the principles of Royal Commission Act to
probe and report on the misconduct in banking system, superannuation and the financial
sector (Perraton 2015). It has also been identified that establishment of the commission
followed the revelation in the public media of greed within many Australian financial
institutions. According to Aalbers (2016) banking and the financial sector of Australia faced a
lack of regulatory intervention by Australian government Authorities which created the need
for developing a royal commission.
Identifying the wrong-doing of Commonwealth bank based on Royal Banking
Commission Report
Home lending through mortgage brokers
Mortgage brokers tend to work with a host of different kinds of lenders but it is highly
important for one to find out which products those lenders are most likely to offer. According
to Robles-Garcia (2019) brokers do not have direct access to products from different lenders.

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So, in the case of home lending, the products can be home loan and hence, brokers offer
home loan. However, the commonwealth Bank of Australia is not immune to financial
wrongdoings because there have been many headlines in relation to changes in the financial
services asked by Royal commission. It is particularly noted that large corporate banks like
Commonwealth Bank are charging additional fees when processing home loan for customers.
On the other side, the brokers also get two different types of commission from the lenders –
such as an upfront commission after the home loan even settled and a trail commission
calculated on the loan amount whole that home loan is operating (Atkins and Charlton 2019).
Every individual with home loan is already paying the bank in the form of interest repayment
on their loan and other fees and charges. As per Royal Commission also clarified in relation
to the investigation and reporting obligation of lenders and aggregators. This means when a
lender or the aggregator identifies that a broker is involved in the misconduct in relation to a
particular home loan, there should always be number of actions to particularly assess whether
the broker have taken poor actions in relation to the matter.
Fees for no service
It has been identified that despite the broad series of changed implications in the
recent financial schemes, some financial organizations tend to charge fees for the services.
However, it has been identified that customers or stakeholders groups to which the bank
provides the services do not provide the demanded services in return of the money being
charged. It has been identified that banking industry’s $850 million ‘fee for no service’
scandal has been a significant issue as per the changes made in Royal Commission Report
(Kerr and Robinson 2016). It has also been identified that Australian Commonwealth Bank
financial planning breached a court enforceable undertaking with respect to fees for no
service. As per the CBA’s financial planning businesses, Commonwealth Bank have
systematically charged ‘ongoing services’ fees to almost 31500 customers between 2007 and