In advance of the Financial Services Royal Commission’s final report due to be submitted to the Governor-General on 1 February 2019, Temenos’ Sales Director Australia & New Zealand, Nick Edwards and Head of Client Advisory, Chris Wooldridge, sat down to provide their view on all things Royal Commission and more.
Among the Key Points Canvassed in the Q&A:
- The Royal Commission is already resulting in an evolution away from a sales-driven mentality to a customer-led approach … with the sales culture and incentives in aligned and third-party distributors to be either removed or more tightly regulated.
- The approach of financial services regulators have arguably been ‘too cozy’; seemingly supportive of the banks and shareholders rather than customers.
- An additional compliance burden will be delivered internally and via regulators – and banks will have a thin line to walk.
- The Royal Commission raises as many questions as it answers:
- Will further wrongdoings are publicly exposed or will consumers be none the wiser?
- What will be the long-term economic impact?
- Will ‘marginal’ borrowers (young, less affluent, less educated) be deemed worthy credit risks, or lose out in the face of excess caution?
- How will banks attract staff without appropriate incentives?
- Open Banking will benefit smaller, newer market entrants as they make better lending decisions and offer efficient customer journeys resulting in a period of a material change in product origination.
- Over time, more ‘alternate’ data about consumers (health, education and driving habits) will be collected to help organizations make decisions and price products.
- Smaller financial institutions might not have the capacity to develop the requisite privacy, authentication and security measures on their own.