Banking is just the latest sector to come under intense scrutiny for unsavoury practices and toxic workplace culture. When this happens, who is to blame: the bosses, or the employees?

As the Australian banking review draws to a close, and the CEOs of the big four banks wipe the sweat from their collective brows, what are we left with after the interrogation of their toxic workplace cultures by the House of Representatives Standing Committee on Economics?

Lack of competition, unjustly high fees, conflict of interest, compliance breaches, fraud and just downright poor treatment were all exposed in raw detail and have all served to further undermine the reputation of these financial giants.

But what if you work for one of these banks? Does the blame for a toxic workplace culture lie with individual employees or the whole sector?

Complacency at the top of the banking sector appears to have permeated the rank and file and, as commentators have argued, led to a green light for bad behaviour.

Take the evidence that emerged from the questioning of Commonwealth Bank of Australia CEO, Ian Narev. He was asked why individual employees hadn’t been punished or sacked for incidents such as the bank denying a particular death was accidental in the face of a coroner’s finding, or using outdated regulations about other illnesses when making decisions affecting clients. And, earlier this year, two Commonwealth Bank staff were allegedly involved in a $76 million Ponzi scheme that was ignored by the bank’s management for five years.

While over at NAB, 43 financial planners were sacked for giving dodgy advice. However, their bosses – the senior executives – have retained their jobs.

Anonymous complaints collected from bank tellers and other staff by the FSU attest to a workforce that operates within toxic workplace cultures. Everyone is stressed, overworked, lacks training and is being pushed into conflicting, unethical behaviour.

One employee wrote: “To keep their jobs and feed their families, they are desperate and will do what is demanded of them – exceed their target – however they have to.”

“Sales targets [are] more important than compliance and the customer,” wrote another.

Financial sector regulation expert Dr Andy Schmulow, a lecturer at The University of Western Australia, tells The New Daily that the problems complained of by bank employees were the ripple effects of wider workplace culture problems.

“Counter staff are experiencing a trickle-down effect of a wider incentive culture, which puts profits first, second and third, and where banks are measured only on profit and face no real sanctions, which is why compliance is either dispensed with or ignored.”

One underlying problem is that some bank employees feel lucky to have a job at all. In the past year, 4229 jobs were made redundant, with Westpac and ANZ getting rid of around 4000 jobs between them. Job insecurity is never a good base from which to build a healthy workplace culture.

Secondly, there has been a slow response among the big four banks to get rid of the link between sales targets and pay. Westpac decoupled pay and performance targets last year after unions and staff criticised it for promoting a sales culture among bank staff, at a time when banks face increasing scrutiny over their employees’ behaviour and accusations of giving customers poor financial advice.

This conflict of interest whereby banking staff are given incentives to sell the bank’s own products regardless of whether or not they are in the best interests of the consumer, are a symptom of the malaise within the sector.

Former national secretary of the Finance Sector Union (FSU) Fiona Jordan says, “Breaking the link between targets and annual salary has the potential to start a long-overdue culture shift in our industry.”

Along with Westpac, NAB, Commonwealth Bank of Australia and ANZ have now shifted their policy, instead linking pay increases to compliance, conduct and behaviours.

It’s a small step, and the FSU says they all have a “long way to go” in developing alternative models. But with the credibility of an entire sector at stake, there is much to be gained.