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The Standard

The Standard is a bi-monthly publication to snapshot financial services regulatory issues and the opportunity to contribute to policy development and submissions.

The First Word

by Chris Whitehead F FIN | 21 Feb 2019
Welcome to the first edition of The Standard 2019.
 
It’s clear the coming months are going to be busy for everyone in financial services, especially regulators.

The Final Report into the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services put the onus on banks to put their collective house in order.

But Commissioner Hayne’s edict for ASIC and APRA to focus on clamping down on breaches of the law has already resulted in a 14-page response from ASIC unveiling the newly formed Office of Enforcement, along with the news that dozens of cases are already underway. 

It is also clear that the retired High Court judge’s exhaustive inquiry has had a big impact over the Tasman Strait in New Zealand, as we report on inside this edition. Regulators there are continuing to call for improvements to firms in financial services, making a series of demands on conduct measures. Given that many of those businesses are Australian-owned, it seems prudent. 

We also take a look at the work of Australian Financial Complaints Authority, which began operating last November. It’s another arm of financial services governance that is extremely busy, handling close to 200 complaints a day. CEO and chief ombudsman David Locke took part in an in-depth Q&A to give a glimpse of the work being done by the dispute resolution service. We are also pleased he will also be hosting a series of FINSIA roadshows in April. 

Despite the daunting backdrop for financial services, there’s a sense that it’s business as usual at FINSIA - striving for higher standards of professionalism.

Significantly for us, Hayne’s 76 recommendations and the government’s initial response sit firmly alongside our long-held view that it is a cultural shift that is needed to restore customer trust. Achieving the highest levels of competency and adopting the right ethical standards are the way forward.

As I have already said, Commissioner Hayne’s recommendations provide a window of opportunity for the industry to show real commitment to change by demonstrating leadership in implementing professional standards that address individual accountability.  

These individual professional standards should be in addition to the established institutional conduct reflected in the Banking Code of Practice. 
 
FINSIA’s philosophy is that we need industry wide action on professional standards that hold the individual accountable to the highest levels of ethical conduct and competency. 

This is in line with the government’s response to Commissioner Hayne’s recommendations saying it supports and encourages industry to develop voluntary codes that “go beyond the requirements in the law” and recognises the role for “voluntary codes in harnessing the views and collective will of industry”.   

As always, we are encouraging members to have their say on the way forward for FINSIA. 

We have already held an interactive Webinar covering the Royal Commission and will be holding a further three face-to-face Town Halls in the next few weeks.

The member only Town Halls in Brisbane, Sydney and Melbourne in March will be an opportunity to discuss the Final Report and steps the industry needs to take to rebuild trust for the sector.  

There will be an interactive element to the Town Halls where members will be able to vote on questions raised about the Royal Commission - and get immediate response. 

Members at the events will also be the first to hear the results of FINSIA’s annual Consumer Research focusing on customer trust levels and expectations of the banking industry in comparison to last year.

There is no doubt the report will result in a profound shake-up of the industry. That’s why we have swapped out our usual in-depth profile for Hayne’s own words.



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