Powered by MOMENTUM MEDIA
the adviser logo
Compliance

Opinion: Who will survive the royal commission?

by James Mitchell5 minute read
Who will survive

When the media circus surrounding the Hayne royal commission finally dies down, the financial services industry faces an uncertain but exciting future.

The big banks and superannuation funds have nowhere left to hide. Commissioner Kenneth Hayne and his counsels assisting have been doing an impressive job sniffing out the truth and revealing the complex web of misconduct that has entangled the financial services sector for decades.

To continue reading the rest of this article, create a free account
Already have an account? Sign in

The Australian public has taken a keen interest in the financial services royal commission. Even those who don’t care for finance have an opinion about it. Financial news typically draw bigger crowds every seven to 10 years, or whenever things go awry (2008, for example).

Watching the fat cats squirm under pressure at royal commission hearings has been exciting in a perverse sort of way. Besides, a consumer uprising has been on the cards since the global financial crisis. Few people really understand what exactly went wrong, but they know it was bad and they are still resentful about it.

Advertisement
Advertisement

Now, it looks like the power may soon be in the hands of the customer. Consider that for a moment.

By the time commissioner Hayne delivers his final report on financial misconduct in February 2019, most of the major changes will be well underway. I envisage more divestments of non-core assets by the banks. Insurance and wealth businesses will be sold or de-merged. CBA, NAB and ANZ have already seen the writing on the wall.

Westpac is still holding onto BT Financial Group, but that will certainly be one to watch over the coming months.

There are plenty of cross-currents impacting the direction of financial services besides the royal commission: open banking, artificial intelligence and robo-advice, to name a few.

But the biggest change could be missed completely by companies that get too caught up in regulatory rumblings and self-centred fear following the royal commission. And that’s the change in consumer attitudes towards the entire financial system.

It doesn’t matter whether you’re a bank, a fund manager, a superannuation fund, a financial planner or a mortgage broker. To Joe Public, you’re a cog in the big bad machine that has been pulled apart by the royal commission and exposed.

The most valuable acquisition financial services players of all stripes can make over the coming years won’t be new robots or platforms. It will be the trust of the consumer.

Winning someone’s trust isn’t easy. Particularly after they feel they’ve been betrayed. The rebuilding of that relationship between financial services and consumers will be long and hard. Many won’t be able to do it. For those that do, the future looks very bright indeed.

The financial services industry of tomorrow will look very different to the one we’re watching commissioner Hayne dissect today.

Companies that can identify what their customers need and, critically, understand how satisfying those needs improves the lives of those customers, stand to gain the most in years ahead.

[Related: ASIC warns lenders not to outsource responsibility to brokers]

Opinion: Who will survive the royal commission?
question fire ta
TheAdviser logo
question fire ta

James Mitchell

James Mitchell

AUTHOR

James Mitchell has over eight years’ experience as a financial reporter and is the editor of Wealth and Wellness at Momentum Media.

JOIN THE DISCUSSION

You need to be a member to post comments. Register for free today

MORE FROM THE ADVISER

matt comyn cba speaking ta bzhun1

CBA CEO acknowledges brokers following mortgage growth

The Commonwealth Bank of Australia (CBA) has released its results for the financial year ended 30 June 2022 and...

READ MORE
wif awards 2021 crowd ta giiu3m

Submissions open for Women in Finance Awards 2022

Hosted by Momentum Media, the Women in Finance Awards is returning for its sixth consecutive year to recognise the...

READ MORE
Cameron Poolman ta

OnDeck confirms origination surge following buyout

In early February, OnDeck Australia’s (OnDeck) executives and investors collectively purchased 80 per cent of the...

READ MORE
magazine
Read the latest issue of The Adviser magazine!
The Adviser is the number one magazine for Australia's finance and mortgage brokers. The publications delivers news, analysis, business intelligence, sales and marketing strategies, research and key target reports to an audience of professional mortgage and finance brokers
Read more