Analyzing Ethical Issues and Obligations in Australian Banking

This essay examines the critical role of ethics in the Australian banking industry, highlighting the increasing challenges faced by organizations in managing ethical conduct. It discusses the ethical obligations of banks, including maintaining integrity, ensuring reliability and transparency, promoting sustainability, and protecting stakeholders from information abuse. The essay references several unethical cases in recent years, such as those involving AMP, ANZ, NAB, and CBA, which have led to significant financial penalties and reputational damage. It emphasizes the need for banks to strengthen their ethical frameworks by adopting ethical theories like utilitarianism and deontology, improving transparency, and investing in technology to prevent unethical practices. The essay concludes by stressing the importance of robust policies and monitoring mechanisms at all organizational levels to address ethical concerns effectively. Desklib provides access to similar essays and study resources for students.

BUSINESS ETHICS

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Ethics in Australian Banking Industry
Ethics plays an important role in the modern day business and it has become crucial for the
organisations to see the challenges they might face in the management of ethics. Today
companies have become a major part of the society and they have a greater role in looking
towards the challenges faced by the company. The challenges have become greater because
the number of stakeholders that are directly affected by the operations of the firms have
increased significantly (Goyal & Joshi, 2011). Australian banking sector have faced many
challenges in the management of ethics in the last few years. Ethics related problems have
become greater because the number of challenges that are faced by the companies have
increased. The changing socio-economic factors and increased political instability has created
an environment where numerous challenges are confronting their business. In this
environment the responsibility of the management have enhanced that they have to manage
these problems in such a manner that ethics related issues does not become so big.
Ethics is important in business because it binds everyone in a belief where they are guided by
the values. Ethics plays an important role in the decision making as it forces companies to
make decisions that are in the interest of all the stakeholders. Ethics has benefited the
companies in different ways. The thing is that it helps the company to make stronger bonds
with the customers. At the same time ethics reduces the chances that they may face conflicts
in their business operations due to any improper practices and hence prevents interruptions in
business (Pérez & Rodríguez del Bosque, 2014). Australian banks are failing to manage their
employee engagement. This has enhanced the chances of the ethical issues arising in the
business units.
There are different ethical obligations for any bank and failing to implement it in an
appropriate manner can lead to different ethical issues for the firm. First ethical obligation is
to maintain the integrity and neutrality. In this regards it is essential that companies maintain
integrity of their business. At the same time they should not have biased behaviour towards
employees or consumers. Discrimination on the basis of any differences can be dangerous for
the firm in the long term. Another ethical obligation is reliability as the banks should be
reliable so that customers also not face any challenges in maintaining a good relation with
their clients (Soana, 2011). Transparency is another important obligation that a banking firm
must ensure so as to remain ethical in business. Since banking sector is related to financial

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transactions hence it is crucial that a bank knows the importance of maintaining a
transparency in the business operations. Faith in the policy and decision maing can only be
ensured when the banks maintain transparency in their operations. Most of the organisation
fails to address this obligation. A firm must explain all the profits and loss that is attached
with their products and services while offering them the same. The advices must be given on
the basis of understanding the need and status of the consumers. It is also an obligation of the
bank that they see the benefits of customers in the long term without actually thinking of their
own.
One of the major obligations of the banks in the current time is sustainability of not only their
own but also of their associated stakeholders. Banks need to ensure that they have a plan for
sustainability in the long term. Since the businesses of most of the firms are dependent on the
loans they have taken from the banks hence banks must also ensure that they do not fail to do
their business appropriately. Since the economic condition of the whole world is degrading
hence it is essential that banks in Australia are able to maintain a healthy banking
environment within Australia. This is necessary for the organisations to ensure that they are
doing sustainable business (Jeucken, 2010). Banks must strengthen the financial capability of
the local community and must be able to provide support to the economic health of the rural
Australia. They should also invest towards improving the life standards of the people. Banks
must fight against money laundering. At the same time, another crucial obligation of banks is
to protect stakeholders from information abuse. At the same time banks must be able to take
competition in a healthy manner and should not move towards unethical practices so as to
stay ahead of the competitors. This must also be maintained in terms of advertisements and
promotions. In this regard the behaviour of the employees becomes very much critical.
Some of the famous unethical cases in the recent years include AMP admitting that they have
deliberately charged fee for no service. Financial planners betraying interests of clients, ANZ
admitting that it is not checking the living expenses of loan consumers, NAB staffs indulged
in bribery ring, CBA found of breaching money laundering laws. Other ethical issues are
former ANZ planner jailed for stealing approx. $1m, Westpac subsidiary sued for market
manipulation in setting bank bill swap rates, Asic finds ANZ guilty for breaching the lending
laws. Ethical dilemma was also faced in terms of fact that chief medical officer of
CommInsure blowing whistle about unethical practices being practiced within the firm. Asic
bans a former director of Macquarie subsidiary for breach of duties (Tadros, 2018). Wespac
payed a sum of $1m because of the credit limit practices. There are numerous such cases

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being recorded in the Australian banking sector. These issues have made it highly difficult for
the management to ensure that they do business that is ethically correct. It is seen that the
numbers of ethical cases in the industry is increasing day by day. This is because they have
not followed the ethical obligations that have to fulfil in order to improve the condition of
ethics in the business. Both organisational level and individual levels of failures have been
noticed in maintaining ethics within the contemporary organisations of Australia. Due to
these, banks have been finned heavily by the authoritative bodies (Wu & Shen, 2013). In the
contemporary business environment, this can act as one of the biggest financial challenges
and can hamper the growth of the firms. At the same time, many individuals have also been
banned from their responsibilities once they have found guilty of not doing their
responsibilities in an ethical manner.
Ethical positions of the companies in the industry have changed over the years. Competition
and intense rivalry in the industry is understood to be one of the major reasons why firms are
continuously facing ethical issues. The examples above shows that the natures of the ethical
issues have changed and the impact of it on the contemporary business have also become
bigger (Bouma, Jeucken & Klinkers, 2017). Firm needs to be very much stiff about the
ethical leak points that can be dangerous for the organisation. Banks need to understand their
capability and importance in order to do business in an ethical manner.
On the basis of ethical theories such as utilitarianism, deontology, virtues and rights,
companies need to change the approach through which they are doing their business.
Maintaining transparency and ensuring the sustainability and ethics at the banks can help the
company in avoiding most of the ethical issues generated in the banking system. The bribery
ring and the betraying of consumers from the side of the financial planners may create bigger
ethical issues (Robertson, 2018). Banks need to follow all ethics related theories so as to
successfully check both the process and the end results.
Companies in the banking sector needs to design the challenges that they might face in the
management of the business operations. As the complexity in business is increasing and
banks need to be more watchful about the things they are doing. In such an environment, it is
crucial that firm make more strong policies that are capable to finding out the source of
challenges and hence working towards it to improve their position towards fighting the
challenges (Tbb, 2014). Since breach of privacy is a major concern in the inter-connected
world today hence companies need to ensure that they have a plan for maintaining the

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privacy and security of the data. In regards to managing ethics banks also need to bring more
technology into practice as the technologies are not wise to carry on with unethical practices.
For concerns related to breaching of money laundering laws a firm must have a double check
measure where they must be able to manage ethics related concern. For a company it is
always difficult to monitor each and every aspect of their business and hence ensuring that no
ethical issues arise at the workplace is a difficult task. In order to remove this, it is essential
that firms keep officials at every level of the organisational structure and they can have a look
at the operations going on so that they can avoid these issues (Robertson, 2018).
Utilitarianism is one of the best theories that support the avoidance of issues such as market
manipulation in setting bank bill swap rates. In the changing socio-political environment
Australian banks need to make policies that should be firm and stable.

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REFERENCES
Bouma, J. J., Jeucken, M., & Klinkers, L. (Eds.). (2017). Sustainable banking: The greening
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Jeucken, M. (2010). Sustainable finance and banking: The financial sector and the future of
the planet. Routledge.
Karp, P. Evershed, N. & Knaus, C. 2018. A recent history of Australia's banking scandals.
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Tbb, 2014. PRINCIPLES OF BANKING ETHICS (*).Retrieved from:
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