Financial Services Sector Inquiries
The Australian Prudential Regulation Authority (APRA) report into the Commonwealth Bank, issued in June 2018, together with the Royal Commission into misconduct in the banking Superannuation and financial services sector interim report in September 2018, the financial services sector is grappling with the implications.
One thing is certain, the bar of community and regulator expectations has significantly risen.
The Royal Commission has seen fees for no service, conflicted remunerations, irresponsible lending and insurance miss-selling as a few of the key misconduct areas.
The findings that have come to light to date are forcing Boards and Senior Management to consider why did these things happen? And what can be done to avoid them happening again?
It would appear that the conduct and culture within some organisations has not always been focused on the customer and the mantra of efficiently, honestly and fairly has been lost. Management of some organisations appear to have put profits before customers and remediation and rectification of known compliance issues has been far too slow.
In parallel, APRA is focusing on supervising the implementation of the Banking Executive Accountability Regime (BEAR) and following up the key areas of concern from the Commonwealth Bank prudential review. Boards need to take note, APRA will be asking questions and looking for a self-assessment against key areas of organisational culture, governance, accountability and review of executive remuneration.
Nothing is certain, but increased regulatory scrutiny and challenge, greater fines and potential court actions are possible, so Senior Management and Boards will be facing some very different challenges in the future.
We appreciate and understand the existing regulation, conduct expectations, risk culture, remediation requirements and process controls governance. We thrive on supporting clients through times of challenge and change.
How can we help?
BDO’s financial services team members come from a variety of exceptional backgrounds, blending their experience to develop new insights and add real value to your business. Our team provides solutions for:
- Remediation program design and execution support as well as quality assurance services
- Preparation and ongoing review of BEAR arrangements
- Risk culture review program guidance and with a focus on substance and demonstrability
- Independent Expert Assurance
- Corporate governance reviews
- Risk management framework and policy design and execution
- Conduct framework review and mystery shopper exercises
- Specified assertions or controls reports such as ASAE 3402 or ASAE 3000
- Fraud, risk and investigations.
- AFSL and compliance plan assurance
- Fully outsourced and co-sourced internal audit
- Information technology assurance and advisory
- CPS 220 and ICAAP reviews
- AML/CTF independent reviews
- Operational due diligence.