In just the short year since the findings of the Royal Commission were published, we’ve already seen rapid change, with the regulators flexing their new enforcement muscles.
What’s more, you should be bracing yourself for more intense regulatory scrutiny on the horizon, as ASIC and APRA strive towards improving customer outcomes, transforming culture and governance, and enhancing resilience across the industry.
With the regulators strengthened approach and more complex rules to navigate, comes increased compliance costs for you. And when you’re also under pressure to hit your commercial goals, we know it can be hard to get the balance right when you’re facing huge regulatory change.
Over the years, compliance and fair customer outcomes have often taken a back seat to profit – the Fees for No Service scandals have been some of the most costly for the big banks. But if business decisions don’t deliver for customers, any profit is likely to be short-lived, and will now almost certainly attract regulatory attention.
Want to navigate regulatory change in the most efficient and effective way possible? Here’s a couple of things you need to focus on:
Creating the right culture
No one sets out to create a bad culture. But if financial results take precedent over customer outcomes, staff will often resort to behaviours that deliver the short-term gains they’re rewarded for, rather than doing what’s right for your customers. Left unchecked, and you’ll start to see a poor culture emerge. More often than not, this is the driving force behind widespread conduct failings.
A healthy culture, on the other hand, will lay the groundwork for long-term success and make your business more adaptable in the face of regulatory change. Inspired staff, who feel like they’re contributing towards something more than just generating profit, are more likely to ride the waves of change with you and continually keep customers at the forefront of everything they do. And good customer outcomes means loyal customers and a happy regulator. What could be better?
While that sounds like a no-brainer, firms often end up making superficial changes and hoping a good culture falls into place. But driving real cultural change takes a concerted effort and a purposeful strategy.