Addressing the FSC-Deloitte Future Leaders awards in Sydney yesterday, the FSI chair and former Commonwealth Bank CEO anticipated that trust in financial institutions will continue to be tested in the “post-crisis period”.
“The GFC reminds us that that major events and dislocations in the financial services industry is extremely costly to an economy, to individuals, to businesses, and in terms of the way the community sees the financial services industry – they know this – and they know they need to be able to trust financial institutions,” Mr Murray said.
“We are in a world now where in the wake of the crisis many things now will continue to keep calling that trust into question.”
Mr Murray listed “stress tests” in the European banking sector, the UK Labor crisis and unprecedented fines handed down to household name institutions in the US as examples of ongoing issues likely to affect consumer confidence in financial services, adding that “We have had issues in this country as well”.
While tight-lipped on any recommendations that may be forthcoming in the FSI report, Mr Murray questioned the ability for effective remedies to cultural problems to be brought about by legislation, instead favouring internal change spearheaded by industry leaders.
“[Culture] can be the basis of competitive advantage and therefore it is extremely important and as a result, extremely hard to legislate for,” he said.
“In fact if you try to legislate for culture you’re trying to make everybody the same and take away competitive spirit.”
He advised the audience of FSC members and stakeholders that “putting human systems first” may be conducive to the “great building of trust” facing industry leaders.
