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FMA conduct review nears completion

Anyone who was hoping to see a big-name bank taken down by the Financial Markets Authority in its review of conduct and culture is likely to be disappointed.

Friday, October 19th 2018, 6:00AM 2 Comments

In a recent update, the FMA’s chief executive, Rob Everett, said it was working with the Reserve Bank to finalise its review of bank conduct and culture.

Sparked by concerns about poor conduct revealed by Australia’s Royal Commission of Inquiry, the two regulators have conducted on-site monitoring visits with 11 banks, conducted 400 interviews, received more than 1000 documents and visited 13 New Zealand towns and cities.

“Our review was based on interviews with bank staff and directors, and documents supplied to us by the banks - it was not an audit of individual files or accounts, or a detailed inquiry like that of the Royal Commission in Australia,” Everett said.

“We have relied on the information and insights provided to us directly by banks, consumer and industry bodies, and other external stakeholders.”

He said the findings of the review would cover general themes that were relevant to the industry as a whole.

“Findings that relate to individual banks will be provided directly to the banks involved and they will be required to deliver a plan to address any risks identified. We also considered any gaps within the framework for the regulation of retail banking services that may undermine the effectiveness or efficiency of conduct supervision or regulation.”

But he indicated that it would not be a once-off check and that the banks would be required to show ongoing good conduct towards customers.

“Good conduct requires ongoing focus and putting the customer at the centre of all activities. We expect the banks to take our recommendations seriously, and devote sufficient focus and resources to making any necessary meaningful improvements.”

The regulators are conducting a similar body of work in the life insurance sector. Everett said a report on that industry was likely in December.

Tags: conduct FMA

« Milford's Brian Gaynor talks markets[The Wrap] Partners Life drops a bombshell »

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Comments from our readers

On 19 October 2018 at 9:24 am R1 said:
The FMA is sounding more and more like ASIC has in the past. No downside risk for bad behaviour motivates more bad behaviour by those incentivised to provide short tern returns. No naming and shaming and no prosecutions, even when we see banks providing bad advice and making even bigger profits than across the ditch.

It is clear that there must be a Royal Commission and the FMA's behaviour should also be included in that; just like the Australian RC.
On 20 October 2018 at 12:06 pm Murray Weatherston said:
Had a very instructive visit to a "spoke" branch of the 01 Bank yesterday to lodge probate for a deceased client for whose estate I am executor. On Friday I could only talk to a teller who was very apologetic but she wasn't sufficient pay-grade so couldn't handle my requirement and I would have to make an appointment to the branch's "salesperson." { BTW if she was busy at my appointment time on Tuesday, I might be privileged to meet the manager who was going to be on-site Tuesday.]
So readers don't miss the point of this comment, Bank staff are obviously in no doubt that their "advisers" are salespeople.
It seems the only people who deny that are the bureaucrats, politicians and regulators.

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    “Hi David and thanks for your words also. I did read the FMA stuff before the post and also in my first response mention...”
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    2 days ago by dcwhyte
  • It starts with governance
    “adviser1 - go talk to Partners Life. they have a great tool to help with this sort of stuff. ...”
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