Anna Bligh, Chief Executive of the Australian Banking Association commented on the state of culture and conduct during the Covid-19 pandemic in a recent speech. “Almost two years ago, I stood at a media conference in Sydney and told the nation that, in the wake of the Hayne Royal Commission, Australia’s banks would do ‘whatever it takes’ to regain the trust of their customers,” she said.
While much has changed since then, Bligh went on to explain that culture is a new element of operational risk.
Culture and conduct related risk has a significant impact on the stability of the banking system. This has elevated such concerns to board-level consideration and is driving culture reform efforts across the Australian industry. Implementation of a new Banking Code of Practice, and restructuring of remuneration for front-line sales functions, offer examples of the industry working together to shift culture and the behavioral predilections it may drive.
Still, more needs to be done. Much current effort is undertaken at an institutional level, with each bank considering their culture and setting their own priorities for change. For lasting industry wide changes for the better, there is need for greater industry collaboration to achieve consensus on how culture and conduct risk is best managed.