We did not listen well: Narev

Commonwealth Bank chief executive Ian Narev said the bank's problems with its financial planning businesses arose because the bank did not listen to customers who were having a bad experience with the bank.

"When you operate at scale the challenge of listening to customers gets more difficult," Narev said.

CBA has paid out A$52 million in compensation to around 1100 customers who received poor advice from its two financial planning businesses, Commonwealth Financial Planning and Financial Wisdom, between 2002 and 2010.

The compensation program attracted criticism when it was revealed that it was not applied consistently across all affected customers of the two businesses.

Last year the bank agreed to offer a further review to 4000 customers and offer up to $5000 to assist them with obtaining independent legal, accounting or financial advice.

In a speech at a Financial Services Council-Deloitte lunch yesterday, Narev said: "At scale you deal with metrics and the broad metrics are excellent.

"But if you have a customer having a bad experience the challenge for us is how to listen to their concerns and act on them.

"We made a decision to sit with customers and hear what it was like for them to have had a bad relationship with the bank. When we heard that we took a different view.

"We are proud of the way we are responding."

Narev made no apology for the fact that the compensation process has been slow-moving.

"Financial advice is bespoke. We are not talking about a product recall. You have to recreate the statement of advice for each customer. We have had to catalogue 900,000 documents going back ten years."

Narev said listening to customers was now one of three key principles the bank focused on to improve customer engagement, along with values and investment.