Powered by MOMENTUM MEDIA
subscribe to our newsletter

Mutuals not immune to risks, says ASIC

The corporate watchdog has warned Australia’s customer-owned banks that they are not immune from the risks associated with poor corporate culture and subsequent “less than satisfactory” consumer outcomes.

Addressing the 2015 Customer Owned Banking Convention in Darwin on Monday, ASIC commissioner John Price said that the regulator has enjoyed a productive and cooperative relationship with the mutual banking industry over the last 15 years.

Mr Price praised the industry’s core values of mutuality, cooperation and self-help.

Speaking about the regulator’s focus on culture and trust in the financial service industry, the commissioner emphasised that ASIC expects firms to ‘do the right thing’ by their customers and comply with the law.

“Where culture is poor or not aligned with customers’ reasonable expectations, the conduct of the entities ASIC regulates can lead to less than satisfactory consumer outcomes,” Mr Price said.

Advertisement
Advertisement

“The mutual industry is not immune from these risks.”

ASIC is considering cultural indicators in its surveillance work, Mr Price said. While the regulator is specifically looking at culture as part of its surveillances, this is not new – ASIC has always considered indicators and factors that drive poor behaviour, he said.

“What we are doing in this culture work is ‘joining the dots’ on the very concrete aspects of the way firms operate to give us a better picture of their culture and how that might affect consumer outcomes,” he said.

“But our biggest focus when it comes to culture is to encourage organisations to reflect on their own culture, and how that might be going wrong and enabling or encouraging unfair treatment of investors and consumers.”

Poor culture, together with poorly designed financial incentives, can be an indicator and a driver of poor conduct, Mr Price said.

PROMOTED CONTENT


“Identifying poor culture can help with detecting not just individual instances of misconduct, but broader, more systemic problems.”

Mr Price said he believed that mutuals are well placed to take advantage of their unique structures to nurture consumer trust and confidence, as “the very foundations on which you are built are all about mutual wellbeing and cooperation.”

Mutuals not immune to risks, says ASIC
mortgagebusiness

Latest News

A high rate of loan repayments through the pandemic has somewhat slowed the growth of Heritage Bank’s book, despite a surge in approvals. ...

Small and medium-sized enterprises were the most commonly targeted victims of cyber attacks in the last financial year, according to new rep...

An overwhelming majority of Pulse Credit Union members have supported the proposed deal with Teachers Mutual Bank Ltd, with the two companie...

Join Australia's most informed brokers

Do you know which lenders are providing brokers and their customers with the best service?

Use this monthly data to make informed decisions about which lenders to use. Simply contribute to the survey and we'll send you the results directly to your inbox - completely free!

How long do you think it should take to discharge a mortgage?

Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.