The financial services industry needs a fundamental shift in culture, according to ASIC.
Speaking at a regulatory summit in Sydney last week, ASIC Commissioner Greg Tanzer said he considered monitoring poor culture in the financial services industry as a key role for the regulator.
“As a regulator, ensuring the trust and confidence of investors and financial consumers is at the heart of everything we do,” he said.
“However, trust and confidence have significantly been eroded over the past few years due to poor conduct within the financial industry.
“ASIC has been saying for some time that one of the core issues within our financial advice industry is poor culture.
“In order to restore trust and confidence, it is unquestionable that we need a fundamental shift in the culture of the financial industry. Culture should not just be about maximising profits at all costs. It needs to change to one that focuses on achieving and rewarding good conduct and good outcomes for customers.”
Tanzer said good workplace culture was not just about ensuring compliance with the law, but instead meant putting the interests of consumers at the forefront.
He says this does not have to mean sacrificing commercial interests, pointing to research that businesses with strong culture tended to perform better over the long-term.
“Those businesses that have a strong customer focus tend to compete more effectively, have higher customer satisfaction, and better customer retention,” he said.
Tanzer said ASIC will be incorporating culture into its risk-based surveillance reviews, with a particular focus on four areas:
- remediation policy and procedures
- reward and incentive structures, including promotions
- recruitment and training policy
- whistleblowing policy.
“There is a need for a cultural shift in the financial industry and that it needs to happen now,” Tanzer said.
“It is going to be challenging and significant time will be required to change culture and embed new attitudes.”