ASIC chairman Greg Medcraft has said that conflicted subcultures are to blame for ongoing consumer mistrust and lack of change within banks, warning the issue is not with “a few bad apples” but with “the damn tree”.
In an interview with the Australian Financial Review, Mr Medcraft said bank subcultures are failing to meet community expectations because efforts to improve culture are not taking effect within departments further down the organisational ladder.
"I think the problem is that by the time it gets to the middle it's white noise. Many big banks have subcultures … and the problem is breaking through," he said.
Mr Medcraft said that while the big banks recognise the importance of good culture and setting the tone from the top, “...the hardest thing for many of them is to recognise if you've got a subculture that is in conflict with the values you want to drive as an organisation.”
"Stop saying it’s a few bad apples. At some point you’ve got to look at the damn tree and say, what's wrong with us as an organisation? That's what I am saying to these guys," he explained.
The chairman said there will be significant consequences for banks who fail to act on improving consumer trust, "These days, the bigger that gap in trust the more prone you are to being disrupted.”
As reported by ifa, ASIC has taken action against the big banks over the past year for a range of financial advice failures and allegations of wrongdoing.
In addition, in December, ifa reported that ASIC is set to receive product banning powers and is expected to seek expanded enforcement and penalty powers in 2017.
Mr Medcraft said the new powers will be a priority in 2017, however ASIC will focus more on “fine tuning” products rather than banning them outright.
The ifa Excellence Awards are back in 2021 and nominations are now open! This prestigious accolade recognises exceptional professionals within the financial advice industry, shining a light on the outstanding achievements from the nation's best and brightest. If this sounds like you or someone you know, then nominate today for the ifa Excellence Awards 2021!
The latest ASIC estimated industry funding levy proves that the current formula is “not equitable or sustainable” according to FPA. ...
An industry body says it is in favour of a change in government as the Coalition have “unfairly targeted” financial advisers. ...
The corporate regulator's cost recovery implementation statement for the 2021 financial year indicates the costs allocated by ASIC to the advice secto...