Banks need to go beyond the minimum regulatory requirements if they want to regain the trust of their customers, according to the UK-based Chartered Banker Institute.
Speaking to InvestorDaily, member-based organisation Chartered Banker Institute president Robert Dickie said regulation alone would not be enough to regain consumers’ trust in the financial services industry.
“The goal is to restore trust,” he said. “And that might mean, in the short-term, going beyond the current regulatory minimum.
“The regulators have done a phenomenal job – but they can’t find 100 per cent regulatory solution.”
He also said “individual accountability” was key to regaining consumers’ trust in the financial services industry, which involved a professional code of conduct as well as a set of “implementable and executable training standards” for new and existing staff.
“Professional standards are the strongest way to demonstrate that accountability,” he said.
“By doing so, you take personal accountability for delivering those professional standards, and adhering to what we call a professional code of conduct.
“And in those professional standards, it can help individual bankers support their banks to meet the individual accountability regime.”
In order to introduce these professional standards to Australia, Mr Dickie said he had met with two major banks earlier that day as well as with Finsia in efforts to develop an Australia and New Zealand version of the UK’s Chartered Banker Professional Standards Board, supported by eight UK banks.
The intention was to integrate these standards into Australian firms “in a much more market-wide, consistent way”, as well as building it into firms’ audit risk and control structures, according to Mr Dickie.
This would be for the sake of “consumers, independent of which bank they use”, who could “know that there is a standard to which the person sitting opposite them [has] been trained and developed to supply that service”.
The next step would be to have financial service professionals “enhance, develop and maintain those capabilities”, he said.
Mr Dickie acknowledged that an obstacle would be the varying rates at which banks adopted these standards, which was “not a bad thing”.
“They’re building trust with the regulator, because given the recent implications in terms of bank scandals, there’s challenges to certain behaviours,” Mr Dickie said.
“I think that relationship has been strained. I think this commitment to embracing ethical standards is one that is getting very good responses from the UK regulators, and I think FINSIA would say they’re getting the same response from Australian regulators.”
It would not be an “overnight switch”.