The financial services industry needs to boost its professionalism to try and win back the trust of the people it services, according to ASIC’s chair.
Speaking at the regulators annual forum, chair James Shipton said that the industry as it currently exists could be seen as lacking in professionalism, which is impacting its trustworthiness to the general public and wider business community.
“If you put yourself in my shoes – those of a regulator – you would ask yourself, ‘Why are there so many examples of poor conduct in finance?’ One view is that there is a lack of professionalism throughout the sector,” Shipton told attendees in Sydney.
Shipton said that building professionalism and rebuilding trust in financial services requires a thorough response, and the entire industry must come together to meet challenges related to these issues.
“To start with, we need to recognise that it will need whole and undivided commitment across the entire financial ecosystem to address this challenge,” Shipton said. “Industry, and the people within it, need to do more and need to take more of a leadership role. ASIC will play its part and we stand ready to advance this goal.”
Shipton said that trust in financial services falls into two categories: The trust placed in the infrastructure of the industry and the trust placed in the people that make up the industry. Trust in the “bricks and mortar that make up the financial system” remains high, but the “sustained degradation in the trust in people in finance” will impact trust in the system itself, he said.
“For there to be sufficiently high levels of trust in the financial system, we need both infrastructure and people worthy of that trust,” Shipton said. “We also know that trust has to be earnt, it cannot magically appear or, importantly for me as a regulator, be legislated for overnight. So to rectify the trust deficit in finance, we need to recognise that: first, we must work hard to earn and re-establish trust; and second, that this rebuilding must be done by establishing the trustworthiness of people in finance through competence, care and ethics.”
Shipton said that the financial services industry needs to remember that it deals with “other people’s money” rather than numbers on a screen as the industry could look to demystify itself to help further build its status.
“On one view, the failure to be able to articulate our ultimate purposes is emblematic of a broader attitude amongst the finance industry – too often, those working in finance are so focussed on complexity, or their particular specialisation, or their own commissions or bonuses that they lose sight of the broader purpose,” Shipton said. “A purpose that does matter to people, society and the economy.”
