Transparency International New Zealand (TINZ) will soon email banks, insurers, financial services and KiwiSaver providers a link to participate in its FISA Online Self-Assessment.
TINZ's Financial Integrity System Assessment (FISA) has been designed so that financial firms can have internal discussions about their conduct and culture. They can benchmark themselves both against industry averages and against existing regulations and guidelines.
An important feature of the FISA Online Self-Assessment design is that the assessment questions can be discussed and entered online. Staff from across the financial firm can contribute to the discussion.
Voluntary participation will attract trust
The International Monetary Fund has stated that only 2% of the world's banks changed their business structures to improve the integrity of their customer relationships in spite of the breakdown in customer trust following the global financial crisis.
Only 32% of consumers strongly agreed banks can be trusted according to the Consumer NZ 2021 survey. And only one in five banking customers felt the banks had their best interests at heart. And last year, New Zealand banks reported 100,067 customer complaints to the Banking Ombudsman.
FISA's assessment approach will help banks, insurers, kiwisaver providers, lenders and other deposit takers prioritise building public trust and better meeting the needs of their customers.
Banks record profitability enabling system improvement
This past year has turned out to be a bumper year for New Zealand's registered banks, even in the face of COVID. In the three months to the end of March, the 27 registered banks reported after-tax profits of $1.73 billion compared to $1.53b in March 2019.
Most recently the ANZ announced a profit of $1.919 BILLION after tax, a 44% increase on the 2020 financial year ended September. This is over 10% of the central government’s operating balance.
The major banks have the resources available to invest in a robust system of continuous improvement of culture and conduct.
Departing FMA CEO Rob Everett
Rob Everett brought his experience of the Global Financial Crisis in the United Kingdom when he became CEO of the Financial Markets Authority (FMA) in 2014.
In his final speech in his role as CEO Everett has been clear that progress on the journey towards comprehensive regulation of conduct in New Zealand’s financial services sector is “no more than halfway”.
“I was genuinely surprised when I got here to hear some senior people in the industry tell me that I didn't need to look at the big end of town, I should focus instead on the operators lurking around the edges
“'Why look at us, we're regulated half to death by ASIC and APRA already’, said one big bank CEO to me.”
Everrett’s departing message is that he is not convinced that the industry, nor the legal and consulting professionals that advise them, have moved forward in that last 7 years while he was at the helm of the FMA.
We think that it is disappointing that the financial industry appears to have paid little attention, if any, to the conduct guide the FMA released in 2017.
Now’s the time to demonstrate that New Zealand financial firms can move forward.
It is the right thing to do.