Financial services leaders are not convinced that current regulations provide the value that consumers seek or support efforts to earn consumers’ trust, according to PwC.
Speaking at the Financial Services Council (FSC) Leaders Summit 2017 on Tuesday, PwC insurance leader, Scott Fergusson, said the extent and sustainability of the sector’s growth would rest on the ability to restore trust in the eyes of regulators and the wider public.
“Without this, the 10-year trend following the GFC [global financial crisis] of ever-increasing regulatory scrutiny and requirements will likely continue, with varying levels of customer benefit,” Fergusson said.
“Because of this, many of the CEOs [chief executives] we surveyed saw regulation as their greatest concern, expecting the significant presence of regulation to either remain the same or increase in the near to medium-term.”
PwC along with the FSC released their report on financial services chief executives on the same day that found CEOs were mostly concerned about how to achieve sustainable growth, how to deal with the impact of greater scrutiny and regulation, and the importance of restoring trust in financial services.
The report said it was increasingly clear that industry and regulators needed to find other ways to achieve closer collaboration, leading to regulation that added real value, met the needs of consumers, and supported rather than hindered good business, innovation, and growth.
“For this, the industry and its members must consistently deliver on their promises to their customers. They must absolutely ‘live and breathe’ their organisational purpose and the spirit of the codes of practice,” Fergusson said.
“They must be transparent with stakeholders on how the codes are being complied with, where issues have arisen, and how they are being dealt with. To build public trust, the industry also needs to show that there are suitable sanctions for non-compliance with the codes.”
He said leading organisations proactively assessed their own conduct risks in the context of evolving customer and regulator expectations, which enabled them to identify, investigate and appropriately resolve any concerns in a controlled and proactive manner.