It will take several years to restore public confidence in the financial industry and its willingness to put people ahead of profits after revelations by the financial services royal commission (FSRC), APRA Deputy chair John Londsdale says.
In the first APRA Insight for 2020, Londsdale said, in response to “commentary on whether the (FSRC) fixed the issues that …. so badly damaged the industry’s reputation”, many of those issues were complex, interconnected and linked to governance and culture failings that had built up over many years.
The industry had made significant progress in tackling several of Commissioner Hayne’s concerns, particularly in the management of non-financial risks, including governance, culture remuneration and accountability.
“For example, 36 of the country’s biggest banks, insurers and super licensees are in the process of implementing remediation plans in the wake of the risk governance self-assessments APRA asked them to carry out in 2018,” Londsdale said.
“It’s not realistic to expect every problem to have been solved in the space of 12 months, especially when many of Commissioner (Ken) Hayne’s recommendations require consultation and legislation,” he said.
In response to the 10 recommendations the FSRC had directed to it, APRA had resolved three recommendations in full and made significant headway towards finalising the remaining seven.
The regulator had also been conducting detailed reviews of the 12 formal case referrals it received from FSRC, involving nine APRA-regulated entities.