The company’s second Global Bank Review considers recent global regulatory developments that focus on culture.
These range from regulatory guidance on governance, misconduct and senior management accountability, to an increasing board-level focus on mental health and wellbeing as risk indicators.
“We have seen regulators around the globe shift from corporate to individual accountability over the last two years,” Will Hallatt, Asia head of financial services regulatory, added.
“You can’t regulate individuals effectively without taking workplace culture into account, so we expect regulators to swiftly turn their attention – and their regulatory regimes – to cultural issues in the year ahead.”
Today in the royal commission hearings, Commonwealth Bank of Australia’s CEO Matt Comyn admitted there were cultural failings within the company, adding that CBA has plans in motion to change it.
“For many banks, the breadth of culture issues is daunting,” said Tony Damian, Australian partner and co-chair of Herbert Smith Freehills said.
“It requires business heads to endorse new styles and structures and to forge new partnerships with parts of the business, such as human resources and strategy.”
Mr Damian added cultural change can be difficult to embed and requires considerable investment in time and resources.
“However, in the long run, that investment will provide a broad range of benefits, including to reputation and to reducing enforcement actions," he said.
Simon Clarke, London partner and co-chair of the firm’s Global Banks Sector Group, says while the financial crisis has dominated regulatory debate over the past 10 years, fintech has blossomed.
“Regulators face real challenges in the fintech space, not least from the speed of innovative digitalised products and services. Regulators have to grapple with steep learning curves and unknown cyber security threats.
“That said, fintechs continue to push the boundaries of innovation, and collaboration between them and established banks may be the ticket to staying ahead of the game.”
Sarah Simpkins
Sarah Simpkins is a journalist at Momentum Media, reporting primarily on banking, financial services and wealth.
Prior to joining the team in 2018, Sarah worked in trade media and produced stories for a current affairs program on community radio.
You can contact her on [email protected].
