It promises to be one of the biggest headline generators in 2018.
The royal commission — the one the Government still doesn't want — opens its doors on Monday, February 12, and is sure to hear more harrowing stories of bad behaviour by banks.
It's officially known as the Royal Commission into Misconduct in the Banking, Superannuation, and Financial Services Industry. Given the big banks dominate the sector, it is really a royal commission into banks.
Even as the banks tell everyone who will listen they have lifted their game — and in some areas they have — the bad news stories keep on coming.
For example: the case of Amy
Amy Nivison-Smith is 22 years old and lives in Sydney.
Since leaving school, Ms Nivison-Smith has worked in a variety of casual and part-time jobs, but last November she secured her first full-time role.
While still on probation, with no guarantee of ongoing employment, she approached the National Australia Bank to borrow $35,000 to buy a car.
"I wasn't actually expecting to get approved, and somehow I did."
"I was in there for maybe 20 minutes and then I was out having been told I was conditionally approved for the loan having no credit history or anything like that."
Despite also having very poor savings history, Ms Nivison-Smith was sold a credit card as well.
The interest rate on her car loan was 14.69 per cent, and then without warning, three weeks ago it was increased to 15.69 per cent.
If Ms Nivison-Smith takes the full seven years to discharge the $35,000 loan, she calculates she will be paying back about $60,000.
Given her low income, she can only afford the $700 a month repayment because she lives at home.
Ms Nivison-Smith's parents believe NAB's actions in their daughter's case are motivated by greed.
"I think it's actually appalling," Ms Nivison-Smith's mother Lesley said.
"I am disappointed, I am upset that she's been allowed to get a loan — a personal loan — for that amount of money when she has limited income.
"She has no money, no savings record; still living at home and we are still supporting her."
Ms Nivison-Smith is not alone in being allowed to borrow money she's not suited for.
Lending is 'the only profit generating game in town'
According to the latest available figures, there has been a 76 per cent increase in complaints about banks breaching their responsible lending obligations.
"The financial sector in Australia is becoming increasingly focused on lending because essentially that's the only profit generating game in town," said long-time bank watcher and founder of Digital Finance Analytics Martin North.
"As the banks jettison other parts of their business, being the wealth management business, lending becomes even more critical."
The Government worked hard to protect the banks from a royal commission but the weight of evidence of dodgy lending, financial planning scandals, insurance rip-offs, and breaches of money laundering laws, forced it to cave in.
The corporate regulator ASIC recently revealed 75 per cent of the advice given by bank financial planners on switching superannuation to their bank's super fund breached the Corporations Act.
So, what will the Royal Commission achieve?
The inquiry has a wide-ranging brief to look at:
- The behaviour of the banks
- Compensation procedures
- How the sector is regulated.
It will be headed by retired High Court judge Kenneth Hayne and will only have a year to complete its work — far less time than most other royal commissions.
"I wonder whether it will spend a lot of time bouncing across multiple issues without necessarily getting to any ultimate conclusions," Mr North said.
"And, actually, I think we really know most of the critical issues which need to be addressed in any case.
"I guess it's more of a political fix from my perspective."
On the issue of a political fix ...
The inclusion of superannuation in the royal commission has angered the super sector — particularly industry super funds — because the Government has made it clear it's aimed at them.
Home Affairs Minister Peter Dutton said they'll face more scrutiny, given they have, in his words, "union members and whatnot on their boards".
The reality is, industry funds are an equal partnership with employers, and the Government's royal commission into trade unions could only find isolated incidents of industry funds not behaving to acceptable standards.
Year after year, industry super funds deliver better returns, and therefore better retirement incomes, than super funds owned by banks.
According to ratings agency Super Ratings, industry funds outperform bank-owned funds by 19 per cent over one year, rising to 67 per cent over 10 years.
"We're not surprised superannuation has been included in the royal commission," Industry Super Australia chief executive David Whiteley said.
"Australia's superannuation pie is now $2.5 trillion and 15 million people are in the superannuation system, relying on it for their retirement income.
"The real issue around super is why bank owned super funds perform so poorly compared to industry funds."
The chance we'll get 'real change'? About 20pc
Despite his concerns about the royal commission, Mr North, remains hopeful it will generate enough noise around key issues that they cannot be ignored.
"It could be that we get sufficient information and evidence that it really does begin to tip the balance over," he said.
"That could be the 20 per cent chance of getting some real change out of this."
Ms Nivison-Smith's mother Lesley also remains hopeful.
"I think the royal commission will be important to look at the banks and to look at their culture, to change the culture on how they look at individuals so that people like my daughter won't end up with this ridiculous loan that she's been able to take out so easily."
For its part, NAB told the ABC the $35,000 loan to Amy Nivison-Smith was based on information she provided.
Whatever the banking royal commission may recommend, it's the Government that will decide if it's a driver of change or a road to nowhere.