It’s a marathon, not a sprint - what lies beyond October 2021? - Audit and Assurance Blog | Deloitte Australia has been saved
With so much effort spent focused on implementing the immense amount of imminent regulatory change, many financial services organisations are left considering, what comes next? What does the world look like post-October 2021 and where should that effort be re-focused?
It’s no secret the volume of regulatory change coming down the pipeline for financial services organisations is vast. In October alone, there are no less than six reforms going live which include the design and distribution obligations, restrictions on the unsolicited selling of financial products (hawking), a deferred sales model for add-on insurance products, reference checking and information sharing requirements for financial advisers and brokers, revised breach reporting requirements and internal dispute resolution. And this is just the beginning, with further regulatory change on the horizon.
While no-one could argue with the fact that these changes are positive for the industry and ultimately support fairer outcomes for consumers - for organisations implementing this change, the process has been complex, and firms have been left grappling with how to embed separate (but connected) pieces of regulation.
Think progress, not perfection
These reforms have typically been implemented in isolation, often due to the nuances provided across the individual provisions, or as result of the organisation’s preferred approach to project and/or change management. In the rush for day 1 compliance, it can be difficult to see the wood for the trees, especially making sense of available opportunities for efficiency across the portfolio of change occurring.
Recognising the challenges faced by businesses in implementing this array of change, ASIC has acknowledged that a ‘transition’ period will be in place:
"ASIC will take a reasonable approach in the early stages of these reforms provided industry participants are using their best efforts to comply."1
We consider it likely that ASIC will consider best efforts having regard to a number of factors including the nature, scale and complexity of a organisation’s business. Typically, in the context of regulation this means ASIC has higher expectations of larger organisations with more resources committed to regulatory change.
This should not encourage complacency – the fundamental expectation is for the whole industry to be compliant from day 1.
This is not the end. It is not even the beginning of the end. But it is perhaps, the end of the beginning.
As everyone falls over the finish line on 5 October, the work, unfortunately, does not stop there. Firms are now turning their mind to where to now and what next? Here are some activities organisations can consider:
There is nothing permanent except change
As the wise words of Heraclitus suggest – there is more to come. This recent period of implementation, while it has been intense, is moving the industry in the direction we all want to go – improving outcomes for customers. But we know further change is inevitable.
Being able to re-focus efforts from implementation to BAU management successfully, while considering the lessons learnt throughout this period, will stand firms in good stead to successfully manage future regulatory driven changes.
 ASIC Media Release, 12 August 2021, https://asic.gov.au/about-asic/news-centre/find-a-media-release/2021-releases/21-213mr-asic-s-approach-to-new-laws-reforming-financial-services-sector/
Rosalyn is a partner in Deloitte's Melbourne office in the Governance, Regulation and Conduct practice. She specialises in supporting firms to design and assess frameworks to treat customers fairly, including the development of conduct, product governance, sales practices and complaints handling frameworks. Rosalyn co-leads our Accountability practice and leads Deloitte’s Design and Distribution and product governance offering.
Carolyn is a Regulatory Conduct partner with over 14 years in Financial Services at National Australia Bank including the Retail Bank, Wealth Management and Financial Advice. She has a proven track record in Customer Remediation, Regulatory Change Implementation, Business Transformation and Portfolio Management. She is commercially focused whilst still ensuring business solutions meet regulatory risk appetite. Carolyn is a strategic thinker with significant experience in creating teams and frameworks to address regulatory expectations and responses.
John is an experienced executive and qualified lawyer (Australia and UK) with in excess of 20 years' experience in professional conduct, risk and compliance including civil, criminal and regulatory surveillance, investigation and litigation focused on failures in business and business processes across a range of sectors including financial services, public listed companies and professional services.