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Hayne right to focus on culture to restore trust, FINSIA webinar panellists say

by Lewis Panther SA FIN | 05 Feb 2019
Panellists on FINSIA’s webinar on the Royal Commission backed our long-held strategy that professionalisation is key to restoring customer trust.
 
Both lawyer Vicki Grey and Volt Bank founder Steve Weston picked out Commissioner Kenneth Hayne’s focus on a need for cultural change as the way forward.
 
But the veterans of Australia’s financial services industry are confident much of the sea change that is needed is already underway - though they say it may take years to see results.
 
Vicki Grey, principal at Mitchell Collins Pty Ltd, said: “The biggest theme that has come out of this has been the requirement to act honestly, efficiently and fairly.
 
“It’s very clear that what some of the regulators have accepted in the past has not been something that the Royal Commissioner sees as an acceptable behaviour.
 
“Dishonesty is not going to be tolerated by the industry at all.
 
“I think all 76 recommendations come back to this one concept of restoring trust in the financial services sector.
 
“A lot of the structural changes - like wealth management at the banks - that could have been recommended have already been taken care of. 
 
“It’s about the culture. Cultural change rather than structural change is at the core .
 
Acknowledging FINSIA’s stance that “professionalism is very important” Ms Grey pointed out that financial services employees had to avoid the tick box approach to gaining qualifications.
 
She added: “We all know the places where you can pass these courses. I think that what Hayne is saying is that professionalism is far more important than that.
 
“You really need to start with the proper skills. It’s not a tick box exercise, which is great to see.”
 
Volt founder Steve Weston, who experienced an overhaul of the banking industry in the UK during the past decade, also recognised the need for cultural change.
 
“Culture trumps structure any day of the week,” he said, adding that if the banks don’t have “the right culture you will always find the low water mark”.
 
The neo bank founder was upfront about his own firm’s chance of success as a result of the the overhaul that is underway, but he lamented the need for a Royal Commission in the first place.
 
“Why isn’t it that we couldn’t fix this ourselves,” he asked. “As an industry of smart people why is it we need law changes, that we need new regulations, new competitions.
 
“I would rather the industry didn’t have to go through what it’s going through at the moment, but it’s not unhelpful. People are more likely to switch banks than they ever have.
 
“The Australian Millennial population has the greatest likelihood to move of any Millennial population around the world and when they hear some of the scandals of the Royal Commission that adds weight to that movement.
 
“At Volt you won’t hear us saying ‘tut, tut, this isn’t good’, it’s a zip up and if you can do better go and do it. Don’t just talk about it go and do it.”
 
Weston said he expected to follow in the footsteps of the UK.
 
“We are in the same movie, albeit four, five or six years behind. So this does give us hope,” he said.
 
After arriving in the UK in 2012 at Barclays - a bank he says that was over 300 years old that was going through a near death experience - he saw the stance develop from one of short term profits and keeping shareholders happy at all costs to one under the Senior Managers Regime. It is akin to Australia’s own soon-to-be-implemented BEAR regime where executives were held personally liable for their actions if things went wrong. 
 
When you are personally accountable you will favour the customer on those 50-50 decisions, he said.
 
But, he says, if you treat the customer right you will get the right results when it comes to the numbers.
 
Click here to see the panellists talking to FINSIA CEO Chris Whitehead F FIN, covering everything from BEAR to mortgage brokers commissions.
 

WATCH THE FINSIA ROYAL COMMISSION FINAL REPORT WEBINAR

Webinar thumbnail - RC Final Report





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  • | Feb 10, 2019

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