Spotlight Back On Banks & Super Funds with Release of Royal Commission Report
31 January 2019
The past twelve months haven’t been great for the banking and superannuation industries, with the uncomfortable insights brought to light by theRoyal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry.
With the Commission’s final report due to be released on Monday, the spotlight will be back on the Financial Services sector with key recommendations for remediation and reform.
BDO Australia’s National Leader for Financial Services, Tim Aman, said the sector is viewing the report as a pathway to improving the industry as a whole.
“There’s no doubt that the Commission’s report will be a difficult read for many, but we’re expecting that, on the whole, the findings will be accepted by industry and the focus will turn to what needs to be actioned to improve the elements that created the issues in the first place,” Tim said.
“It’s clear that the conduct and culture within some organisations has not always focused on the customer and that the professional mantra of: efficiently, honestly and fairly has been lost along the way. In some cases, management of some organisations appears to have put profits before customers and remediation and rectification of known compliance issues has been far too slow, and this will need to change going forward, with the bar set by community and regulator expectations now much higher.”
“Key considerations following the release of the report will be on:
- Organisational Culture - its impact on conduct and behaviour. No longer can companies appear to put profits before customers. Cultural shifts will occur from top-down to encourage a risk-minimisation
- Governance and the ‘active’ engagement and involvement of Boards - Directors need to demonstrate that they are engaged with emerging non-financial risks and are geared to call out any poor behaviour of the management team.
- Review of executive remuneration – pay and reward structures that don’t encourage risky behaviour.
“We can expect to see increased Regulator scrutiny, greater fines and potential court actions.
“Many organisations have already commenced internal programs to challenge their current governance, reporting, compliance and remuneration models.”
The full report can be found at https://financialservices.royalcommission.gov.au/Pages/default.aspx