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FINSIA submission to Royal Commission says professionalism is the way forward to restore trust

by Lewis Panther | 25 Jun 2018
FINSIA’s Royal Commission submission has been handed in with the message: professionalism is key to rebuilding trust. 500 FINSIA submission to Royal Commission says professionalism is the way forward to restore trust

The eleven page document lists three core recommendations to raise industry standards of professionalism to improve customer service.

Number one is to establish professional standards of conduct and competence with an independent standards body, formalising professional membership bodies and underpinning the Banking and Finance Oath.

The second key recommendation is to require completion of professional qualifications at defined roles and levels of seniority.

And the third is to implement an annual certification process to provide a Statement of Professional Standing.
FINSIA’s input and plans for a fundamental overall of the financial services sector has been praised by the architect of similar reforms in the UK that followed the global financial crisis.

Chartered Banker Institute managing director Giles Cuthbert — who has more than 20 years’ experience of enhancing professionalism in banking and helped the drive towards greater professional standards in the UK — said FINSIA was perfectly positioned to do the same.

The drive towards professional standards is clearly worth it, according to Mr Cuthbert, adding that the support of the banks and regulators is necessary for the process to work.

Research shows confidence in banking in the UK has improved by 10 per cent over the past four years, with customers preferring to do business with professionals.

Before the GFC, in 2004, there were just a few hundred professionally-qualified UK bankers. Now thousands take professional qualifications every year. 

Mr Cuthbert said: “After the GFC we were in a situation where banks realised they needed to change and we at the institute thought there was something of an absence in the area of professional standards.

“We suggested a professional standards board for bankers. After all, every profession has professional standards of conduct and behaviour and technical knowledge, but bankers didn’t.

“Now we are in a position 10 years on when we think we’ve done a great deal with the banks and the regulators to restore confidence and trust in banking.

“It’s great to see FINSIA working so quickly in this regard and indeed Australia responding to FINSIA’s work. 

“It takes a very long time to bring the banks together, to get everyone working together. 

“Developing a professional qualification is not like an academic qualification. You can’t just get a book off the shelf, you need to engage with a broad range of professionals.

“You need to get that serious knowledge from an experienced individual and build it into a qualification.

“I’m delighted to say FINSIA has all those key relationships in place to build something here.

“There seems to be a real desire to raise standards in banking. And that’s what I would hold on to here. Let’s look at all those activities that are being put together for the banking professional and look at the best way we can to facilitate that and advance it.”

Mr Cuthbert also spoke up for the thousands of bankers and financial sector workers who have had to sit by as the behaviour of some has caused the need for the Royal Commission.

He said: “We recognise there has been wrong doing and we need to take that as an opportunity to build standards to make banking better for the future.

“The interesting distinction to me is that there has been far more evidence taken from individuals (at the RC than back in the UK). These situations are always very difficult. 

“Thousands of people go to work to do the right thing.Thousands of people became bankers simply to do the right thing, to do good to society at large. 

“Every organisation makes bad mistakes and in every organisation you get bad apples. For me the message in that is if you had a professional standard that is universal at least you could point out how you do things across the industry and this is the right way to do things.

“I think the difficult position that is emerging now is there is some debate in some of the cases I have seen around about what is the right thing to do.

“That is what happens when you don’t have professional standards.

“When you have professional standards you can say: ‘Yes, that customer didn’t like what happened but the bank did do the right thing’. It’s very easy for the media to turn an unsatisfied customer into a tragic case.

“Now I’m sure lots of these are genuine tragic cases but until you have standards how do you work out which cases fell below that level of expected behaviour and which were above it, but it was just the individual customer didn’t like what happened.”

The Royal Commission, he says, perfectly highlights the case for professional standards so “we can clearly identify where wrong doing was done and help those who had wrong doing done to them. But also so we can defend those who didn’t do anything wrong.”

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