RBA attacks ‘sales’ culture within financial services

RBA governor Philip Lowe says he is “appalled” by the behaviour uncovered at the royal commission and hopes the sector can start focusing on delivering service rather than sales.

Appearing before a parliamentary committee on Friday, RBA governor Philip Lowe said the royal commission hearings into superannuation over the past two weeks has "really showed the benefit of sunlight".

"What we've seen through the royal commission is deficiencies in all three areas: the trust between financial institutions and communities has been strained, there has not been enough focus on customer service (it has been more of a sales mentality than a service mentality), and risk management has not been all it should have been in financial intuitions," Mr Lowe said.

He was particularly focused on conflicts of interests within financial services, which he said "seem pervasive".

"Dealing with those conflicts has not been top-of-mind in many financial institutions and it should have been," Mr Lowe said.

"Conflicts can be dealt with, they can be managed, but they need to be top-of-mind and if they are not top-of-mind in financial instructions then it continues to strain the bonds of trust between institutions and the public."

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He also drew attention to remunerations structures within financial services, which he said have "driven quite poor behaviour in many cases".

"This has been recognised [by government] and [APRA chairman] Wayne Byres has talked about it," Mr Lowe said.

"Dealing with those two issues – the conflicts of interest and the remuneration structures within financial institutions – seem to me to be high priorities because we need to rebuild trust, we need to have a very strong focus on delivering service rather than sales, and risk management."

RBA attacks ‘sales’ culture within financial services
RBA, Reserve Bank of Australia, Philip Lowe, financial services, sales, royal commission
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