Royal Commission & CBA: A Critical Review of Marketing Systems

This report provides a critical review of the Commonwealth Bank of Australia's (CBA) marketing system, focusing on the impact of the Royal Commission into the banking industry. The review examines the misconduct of CBA, highlighting how it affected the bank's marketing strategies and customer relations. It delves into specific cases, such as misleading practices, mortgage customer issues, and programming faults, to illustrate the consequences of these actions. The report analyzes the role of the organization within the marketing system, emphasizing the need for ethical practices and transparency. It also provides recommendations for CBA to improve its marketing strategies, reduce future misconduct, and rebuild customer trust. These recommendations include changes to incentive structures, proactive steps to improve management and leadership skills, and the use of social media for promoting new policies. The report concludes by emphasizing the importance of adapting marketing strategies to regain public confidence and attract investment, ultimately contributing to the growth and development of the company.

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Name of the topic: MARKETING SYSTEM
Student details:

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CRITICAL REVIEW
Organizational background
This paper involves the critical review of Royal Commission into the banking industry of
Australia focusing more on the Commonwealth Bank of Australia (CBA). The review highlights
the significance of different marketing structures and functions required by the bank to reduce
the conditions to be involved in future scandals. Royal Commission exposed the misconduct of
CBA, which had a great impact on the marketing systems of the bank.
The role of organization within a Marketing system
Commonwealth Bank of Australia (CBA) is one of the biggest multinational banks of Australia
founded by the Commonwealth Bank Act 1911. In 2016, Commonwealth Bank of Australia
admitted that they have conducted a misleading practice to cover the heart attack by making
wrongdoings within the organization. Along with adapting the wrongdoing practices, the royal
commission also heard that CBA persuaded the supervisors to soften their language while
providing any information to the media related to the involvement of the misconduct. This can
result in terms of penalty for following the misleading advertisements (O'Brien, 2019).
This was a drastic mistake of CBA, which can result in the downfall in the capital of the
organization and can affect the company’s market image and condition. These failures allowed
for exploring deeper about the condition and suggesting various theories, which can be focused
for ending such activities in future. The evidence of this conduct in the organization can be found
in the media reports focusing on various archaic medical definitions taken by the company to
neglect the payment of the claims (Christodoulides et al., 2018).

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In 2018, royal commission conducted a report on the misconducts happened in the
Superannuation, Financial Services and Banking Industry. This study concentrated more on
the Commonwealth Bank of Australia. The following are some of the critical review of the cases
analyzed by the researchers.
The study of (Palmatier, 2018), shows that Commonwealth Bank of Australia (CBA) told
Banking Royal Commission about the higher pay paid by the mortgage customers on their loans.
The research made it clear that CBA has admitted about the misconduct, which caused conflicts
in the company regarding the interest. The market image of the bank was almost at the end by
such of the activities and practices. This affected the commercial departments of the bank due to
which the medium or small enterprises businesses were damaged. The interest was decided
according to the payment of commission that was made by the Banks to the mortgage brokers.
The research of (Thomas & Czaplewski, 2017) analyzed that CBA sent two-week notice to the
brokers for the withdrawal of their authorization. The spokesperson of bank told Australian
broker that this was a part of the activities of the CBA services and products. The author
suggested that the salesperson can find the activities to be followed for selling the products of the
company. Such conducts resulted in less investment of the customers within the bank and
resulted in amendments in the policies and papers of CBA.
The case study of (Parliamenrt of Australia, 2018) explains about the programming fault in the
automated serviceability calculator that as used by the bank to evaluate assured submissions for
private drafts of the bank. The drafts decided by the bank is to be informed o the customers
having the drafts of their name. This study declares that CBA failed to take into deliberation the
announced living and housing expenses of around 11059 customers, and resulted in the break of
obligations of CBA under the NCCP Act. This further leads to lack of public interest for the

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investments in the Bank. Furthermore, the study of (Lynch, 2018) shows that Bank West
takeover CBA and the appalling done by APRA’S was failed. For the settlement of this condition
the researcher advises that the bank can identify different marketing strategies for attracting more
customers for investing in the bank. And this can further help the organization for improving the
market behavior towards the company. the use of social media for promoting new policies
through advertisement can help the company to solve the issues. The researcher showed that
CBA has presumed obligation for the loans provided by bank when it developed.
Recommendations:
It is necessary for a bank to adapt some of the marketing strategies for the betterment of the
publicity and the market image of the CBA. Here are some of the recommendations for
Commonwealth Bank of Australia (CBA) to reduce the future misconducts, which can have a
strong impact on the marketing system o the bank (Chari et al., 2017).
 Incentives should be no longer remunerated to any selling based staff solely or directly on
the sales performance of the bank.
 The selling culture of retail banks is demonstrably ethical and should be more concerned
about the consumers (insurancenews, 2018).
 An important investment needs to be undertaken to assure that performance is succeeded
constantly with a great viewpoint. The viewpoints are to be supported by proactive steps
to raise the management and leadership skills of the bank at all levels of the market.
 The policies are required to have some changes in the market policy of CBA. However,
with clear and understandable leadership shown by the top level and senior managers of
bank the changes can be more counseled and directed accordingly (Micu et al., 2017).

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 Instead of receiving personal incentive payment based on assessment of that contribution
of individual across a range of matters, the bank should provide personal incentive
payments to the consumers for attracting more of them to invest in the bank and have a
good market policy.
 CBA can create an affiliation program that can help the organization to grow in effective
and efficient manner. The program can help the company to recruit those able
personalities, who can help in the growth and development of the company in future.
The significant characteristics of these recommendations were proposed to eliminate the future
misconducts or mistakes of the bank for reducing the incentive solely and directly. The
incentives were directly related to the sales and diminishing the effect of sales on the
performance scoreboards of the Commonwealth Bank of Australia (Gilligan, 2019). Necessarily,
the observation done in the reports, which showed that not all the indicators of desirable behavior
can be analyzed.
PEER REVIEW REFLECTION:
The recommendations for the betterment by the peer includes consideration for how profitable is
the market condition of CBA is in Australia. I have researched more in the journals of the
parliament of Australia where the government declares that CBA is conducting some
inappropriate practices in the organization, which is affecting he policies and practices in the
bank. The performance of the bank was being affected by such conducts. It is greatly
understandable and clear to analyze and evaluate the financial performance of the bank for
reducing such future scandals of the company. The critical review done by the Royal
Commission on CBA reveals all the wrongdoings of the bank. These wrongdoings lead to some

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of the issues and problems that were faced by the bank. I decided to go deeper in my undertaking
about the review generated by different cases in banking royal commission. Thus, through the
above discussion, it is clear that the organizations can face some of the issues and problems
related to the wrong conducts of the business activities. Therefore, with the adaption of the
marketing strategies I got to know that CBA can build the trust of people again and can attract
them for investing in the bank.
REFERENCES

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Chari, S., Balabanis, , Robson, M.J. & Slater, S., 2017. Alignments and misalignments of
realized marketing strategies with administrative systems: Performance implications. Industrial
Marketing Management, 63, pp.129-44.
Christodoulides, , Michaelidou, & Siamagka, N.-T., 2018. Social media, content marketing and
engagement strategies in B2B. Industrial Marketing Management.
Gilligan, G., 2019. The Hayne Royal Commission–just another piece of official discourse? Law
and Financial Markets Review, 13(2-3), pp.114-23.
insurancenews, 2018. CBA to refund customers mis-sold consumer credit insurance. [Online]
Available at: https://insurancenews.com.au/corporate/cba-to-refund-customers-mis-sold-
consumer-credit-insurance [Accessed july 2019].
Knaus, & Hutchens, , 2018. CBA admits wrongly selling insurance to 60,000 unemployed
customers. 19 November. pp.1-3.
Lynch, , 2018. CBA’s BankWest takeover debacle and APRA’s “appalling” regulatory fail.
[Online] Available at: https://www.michaelwest.com.au/cbas-bankwest-takeover-debacle-and-
apras-appalling-regulatory-fail/ [Accessed July 2019].
Micu, , Micu, A.E., Geru, M. & Lixandroiu, R.C., 2017. Analyzing user sentiment in social
media: Implications for online marketing strategy. Psychology & Marketing, 34(12), pp.1094-
100.
O'Brien, J., 2019. “Because They Could”: trust, integrity, and purpose in the regulation of
corporate governance in the aftermath of the Royal Commission into Misconduct in the Banking,

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Superannuation and Financial Services Industry. Law and Financial Markets Review, 13(2-3),
pp.141-56.
Palmatier, R., 2018. Advancing marketing strategy research. Journal of the Academy of
Marketing Science, 46(6), pp.983-86.
Parliamenrt of Australia, 2018. Misconduct in the banking, superannuation and financial
services industry—Royal Commission—Interim report—Volume 2: Case studies. [Online]
Available at: https://parlinfo.aph.gov.au/parlInfo/search/display/display.w3p;query=Id%3A
%22publications%2Ftabledpapers%2Ffcfefe9b-55d3-4f60-9400-ed53ce396066%22;rec=0
[Accessed July 2019].
Thomas , M. & Czaplewski, , 2017. Upstream social marketing strategy: An integrated
marketing communications approach. Business Horizons, 60(3), pp.325-33.