Financial services firms should incentivise prudent behaviour rather than depend on regulators to remove ‘bad apples’ after the fact, says APRA chairman Wayne Byres.
Speaking at the Australian Financial Review Banking & Wealth Summit in Sydney yesterday, Mr Byres said regulators have been accused of being on a “culture crusade”.
“That’s not the case. Indeed, regulators are really keen to see the industry lead the running on this issue,” he said.
“We need the financial sector to take up the challenge to put in place better incentives for prudent behaviour, so as to prevent problems emerging in the first place.
“That is likely to be far more productive than spending our time removing so-called ‘bad apples’ after the fact.”
While ASIC and APRA have put culture in the spotlight, the onus is on the financial services industry to “do something about it”, Mr Byres said.
“There are good signs that is happening. Our engagement with boards has highlighted they are thinking about this issue more systematically.”
Industry-wide initiatives such as the Banking & Finance Oath and the associated Ethical Literacy Program are also encouraging.
“Balancing ethics, prudence, customer interests and shareholder needs in a commercial environment is a challenge that belongs to everyone in financial services,” Mr Byres said.
“We’ve all got work to do to get the balance right and the sins of the past continue to emerge, but at least the issue is starting to get the serious attention it deserves.”
The Finance Sector Union of Australia has urged government action on consumer credit insurance and bank cultural issues following ASIC’s r...
Consumer complaints relating to investment and advice rose by 69 per cent in the first six months of the Australian Financial Complaints Aut...
The corporate regulator has clamped down on financial services licensees who have failed to gain membership with the Australian Financial C...