Rebuilding trust in financial services after the Royal Commission
The Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry (Commission) released its Final Report on Monday 4 February 2019 (Final Report). The Final Report needs to also be read in conjunction with the observations and findings of the Interim Report.
It has been well documented that the Commission received over 10,000 public submissions and held 68 days of hearings. The Final Report seeks to take what has been learned in respect of each part of the financial services industry that has been examined and identify issues, causes, and responses/recommendations. The Commission refers 24 instances of misconduct to the Australian Securities and Investments Commission (ASIC) and the Australian Prudential Regulation Association (APRA) for prosecution.
In its Final Report, the Commission continues to identify dishonesty and greed as the two main drivers behind the misconduct to date, declaring that the pursuit of short-term profit has been too often prioritised at the expense of basic standards of honesty.
The Commission’s work has four clear observations: the connection between conduct and reward; the asymmetry of power and information between financial services entities and their customers; the effect of conflicts between duty and interest; and holding entities to account.
The Commission sets out its final recommendations and findings about the Australian banking and financial services sector under seven broad categories in the Final Report, each of which is summarised in more detail below.
Read our report, Rebuilding Trust