Financial institutions invited to undertake online self-assessment
Image from Transparency International New Zealand website
Transparency International New Zealand (TINZ) will soon be emailing banks, insurers, financial services and KiwiSaver providers a link to participate in its online FISA self-assessment.
TINZ’s Financial Integrity System Assessment (FISA) was designed for financial companies to have internal discussions about their conduct and culture. They can be compared to both industry averages and existing regulations and guidelines.
An important feature of the design of the FISA Online Self-Assessment is that the assessment questions can be discussed and entered online. Staff from across the finance company can contribute to the discussion.
The International Monetary Fund said that only 2% of banks worldwide have changed their business structures to improve the integrity of their customer relationships despite the breakdown in customer trust following the global financial crisis.
According to the Consumer NZ 2021 survey, only 32% of consumers strongly agree that banks are trustworthy. And only one in five bank customers felt that banks had their best interests at heart. And last year, New Zealand banks reported 100,067 customer complaints to the banking mediator.
FISA’s valuation approach will help banks, insurers, KiwiSaver providers, lenders and other depositories prioritize public trust and better meet the needs of their customers.
Profitability depends on improving the system
Last year turned out to be a banner year for registered banks in New Zealand, even in the face of Covid-19. In the three months to the end of March, all 27 registered banks reported after-tax profits of $ 1.73 billion, up from $ 1.53 billion in March 2019.
More recently, the ANZ reported an after-tax profit of $ 1.919 billion, an increase of 44% from the 2020 fiscal year ended in September. This represents more than 10% of the operating balance of the central government. Big banks can afford to invest in a robust system of continuous improvement in culture and conduct.
Departure of Rob Everett
Rob Everett brought his experience of the global financial crisis to the UK when he became Managing Director of the Financial Markets Authority (FMA) in 2014.
In his last speech in his role as CEO, Everett made it clear that progress towards comprehensive regulation of conduct in New Zealand’s financial services industry was “only halfway” .
“I was really surprised when I got here to hear senior industry executives telling me that I didn’t need to watch the bulk of the city, I should instead focus on the operators in hiding. the edge. “Why look at us, we’re already half-regulated by ASIC and APRA,” the CEO of a large bank told me. “
Everett’s starting message is that he is not convinced that the industry, nor the legal and consulting professionals who advise them, have progressed in the past seven years while he was at the helm of the FMA.
We think it’s disappointing that the financial industry seems to have paid little or no attention to the conduct guide released by the FMA in 2017.
Now is the time to demonstrate that New Zealand financial firms can move forward.
It is the right thing to do.
Suzanne Snively is Project Manager, Financial Integrity System Assessment at Transparency International New Zealand. The above article appeared in the November 2021 issue of the ‘Transparency Times’.