Consumer confidence in banks will improve if groups scrap employee sales targets and make product recommendations based on customers’ best interests, the Financial Sector Union says.

In the union’s argument for a royal commission on banking, Acting National Secretary Geoff Derrick says a number of questions need answering and last week’s parliamentary hearings did not suffice.

“Bank customers are well aware of the culture that treats them as a ‘sales target’ whenever they engage with their bank,” he said. “Bank employees want to deliver service to their customers instead of being under constant pressure to just sell extra banking products.”

The union says Westpac staff have to refer two clients a day to specialist business partners in the organisation under a new performance minimum for their career grading.

“Customer confidence in bank staff would increase if product recommendation was based wholly and genuinely on what’s best for the customer, rather than hitting aggressive sales targets set by executives earning huge bonuses,” Mr Derrick said.

“I realise the business needs to make money to stay viable, but why do the front-line staff in branches feel so stressed about their targets?

“Shouldn’t the mentality be just to look after each individual customer’s needs regardless of whether it’s a service or revenue-making interaction?”

He says staff have been told to outperform sales targets, including on insurance, despite the push for customers to use internet banking for many needs.

The union questions why performance recognition is achievable only through sales, and not advice outcomes.

He says banks should strive to find financial solutions for customers, rather than setting sales targets for workers.

“Staff are pressured to meet sales targets [that are] increasingly unattainable due to their successful migration of customers to digital banking,” Mr Derrick said.

“Around the world, it is now recognised this is the incorrect model for banking, and customer retention is the true source of revenue.”