Your InFinance Publication

FINSIA’s InFinance keeps you up-to-date and in-the-know. 

Editor's Pick: Professionalism is the solution to the trust deficit, consumer research finds

by Lewis Panther | 12 Apr 2018
Customers would switch banks so they could deal with professionally qualified staff, research released by FINSIA has found. Professional qualifications important to consumers, research finds InFinance FINSIA

More than one in 10 would jump ship to get a professional service — with that figure rising to almost one in five among the under 45s

Findings from the consumer research carried out by the RFi Group, released by FINSIA, show a message from customers that is loud and clear: We want you to become more professional.

The research comes against the backdrop of the Royal Commission and a succession of senior industry figures admitting just that.

However it is no surprise to FINSIA’s CEO and Managing Director Chris Whitehead who has long advocated the need for industry-wide standards of professional conduct and competency for employees in the industry.

The feedback from customers puts the banks on notice that they need to get their house in order.

Mr Whitehead says, “There is a strong business case for banks to professionalise with 13% of consumers (19% of those aged between 25 to 44) saying they would change to a bank where more staff were professionally qualified.

“Furthermore, three in five consumers would trust their bank(s) more if staff had professional standards.”

The research also revealed that while most bankers had a degree they did not continue to earn recognised workplace qualifications after graduating into employment.

That is despite the fact two out of five of the consumers surveyed said ALL staff should have professional qualifications. The figure rises to three-quarters who believe senior staff should have professional qualifications.

Mr Whitehead added, “Consumers place more trust in the person they are dealing with than in the institution. However there is still a lot of scope for improvement to rebuilding trust with only 66% of consumers surveyed believe staff have high ethical standards compared to 43% for the Australian banking industry.

“The Banking Codes of Conduct set institutional standards. However, they are not enough.

“What is missing is a code of professional conduct that focuses on individual accountability to ensure good individual conduct and competence.

“This should provide mechanisms for independent monitoring, review, and individual discipline when provisions of the code are breached. It has to be supported by professional competency standards.

“To ensure these standards are being adhered to and maintained, 81% of survey respondents believe it is important to have a professional body overseeing industry standards.

“Professionalisation will positively influence industry culture and the judgement of one’s peers is a powerful tool for industry reform.”

Mr Whitehead’s views about the findings were echoed by ASIC chairman James Shipton at a keynote speech earlier this month.

The regulator told a finance industry summit in Sydney of the need for professional bodies because of the lack of trust in the sector.

He said: “We need greater levels of professionalism in finance, including in the banking and wealth sector.

“It will need whole and undivided commitment across the entire financial ecosystem to address this challenge.

“The industry needs to play its part in the good functioning of the financial system.

“We have been talking about the trust deficit in finance for far too long. It is time to move beyond the rhetoric to real solutions.

“We know that trust has to be earned — it cannot magically appear or be legislated for overnight.

“So we must work hard to re-establish trust by establishing the trustworthiness of people in finance through competence, care and ethics.

“We need to recognise every cent in the financial system is ‘other people’s money’.

“Finance is not ‘just numbers on a computer screen’ or just a means to receive a commission or a bonus.

“Nor is it just about large institutions like banks, superannuation funds or investment funds.

“It always comes back to people — banking and wealth management, like everything in finance, is a vital component of real people’s lives.

“The industry, and the people within it, need to do more to support the proper functioning of the financial system.

“They need to take more of a leadership role in promoting professionalism.

“The industry itself, working with standard setting and professional bodies, could promote and perhaps even require professionalism within their sectors.

“They could, like a number of professional bodies, regulate and, if necessary, sanction participants for conduct that does not live up to their own professional standards or community expectations.

“Ultimately, the financial industry needs to expect more of itself and from the people that work within it.”



Comments

Share this