“The current parliamentary inquiry into banking is inadequate and is proving to be a paper tiger,” Mr Mennen said.

“The parliamentary forum format enables the banks to avoid questions by citing ‘competitive sensitivities’. There is simply not enough time for issues to be dealt with in more than a superficial glossing over.

“What we are seeing is essentially a PR exercise by the banks, which these bank executives, paid millions of dollars each year, are very good at. Their platitudes, spin and denials shield the public from exploring the real issues that have left so many victims in financial ruin.”

Mr Mennan noted that banking practices exposed in recent media reports were a clear sign of deep problems across the sector.

“The banks’ focus is no longer on [their] customers,” Mr Mennen said.

“Attention now seems severely skewed toward revenue and sales rather than customers – this is a deep cultural problem, so the ‘few bad apples’ excuse doesn’t wash.

“It’s not at all surprising that insurance claims staff have avoided meaningful discipline for mistreating deserving claimants, because claims assessors are encouraged to deny claims to meet their work targets.”

Mr Mennen proposed to expose the cultural issues in the banking sector by setting up a royal commission. He said this would be a more effective way to look into the issues than setting up a new banking tribunal, as the government has previously proposed.

“Only a royal commission can give the necessary level of scrutiny needed to explore and address the systemic problems, by compelling document production and oral evidence under oath,” Mr Mennen said.

“A new tribunal would look at individual complaints and be remedial in nature. Whilst it is essential that consumers who have been wronged are fully compensated, we also need to address the causes, which are deeply rooted in industry culture.

“To do that, we need a royal commission conducted with openness and transparency.”