Eleven months on from the first round of hearings for the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry, Commissioner Hayne’s final report has been released. The report offers 76 recommendations, all of which the Federal Government and Labor say they will implement.
We have been following the Royal Commission closely over the past 12 months, working with the Customer Owned Banking Association (COBA) to issue two reports on A Case for Proportionate Regulation and holding regular roundtable discussions with our banking and superannuation clients. We have reflected not only on how the Commission has impacted the banking sector, but also on key learnings that our clients can take from the findings, and apply them to their own organisations.
We were surprised by what wasn’t in the report. There was nothing in there about banning vertical integration and changing the composition and structure of the industry. There will be no individual criminal prosecution, little impact on executive pay and bonuses, lenders mortgage insurance will be unaffected and APRA and ASIC will remain as individual regulators.
However, there was still a lot that came out of the report that was expected. Recommendations such as assessing and addressing culture and governance, extending BEAR to all APRA-regulated financial services institutions and implementations of the recommendations made by ASIC’s Enforcement Review Taskforce.
Our 5 key takeaways from the report were:
There will be legislative change
- This will require changes to your policies and procedures
- This will mean training for staff, executives and board members
Fee structures will change
- Business models and revenue/product strategies will need to be reconsidered
- Remuneration models will change
- Staff will be anxious