AFR Banking and Wealth Summit 2016 key insights

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AFR Banking and Wealth Summit 2016

The new era in financial services

Regulators, financial institutions, government and innovators came together at the Australian Financial Review Banking & Wealth Summit to candidly exchange ideas, and debate the tensions between stability and innovation, customer trust and corporate culture. 

As Deloitte financial services industry leader, Arthur Calipo stated in his closing remarks - three words dominated - culture, culture and culture. The key themes that emerged from the diverse range of speakers were: balance in regulation, the importance of collaboration in innovation, and the central role trust plays for customer.  

Deloitte was proud to help shape the debate together with the Financial Review and Informa and is delighted to share some of the highlights below in a playful articulation of the conversations with leading industry figures, as we look for ways to turn challenges into opportunities.

View the full AFR Banking & Wealth Summit agenda 2016 for more details on the conversation topics. 

Culture, culture and culture were the three words that dominated the AFR Banking and Wealth Summit in Sydney on the 5th and 6th April 2016.

Candid exchanges of ideas between Australian and international leaders in financial services, including many of Deloitte’s own experts, stimulated debate on the tension between stability and innovation, between challenge and opportunity, and customer and shareholder. As you will see from our video highlights, attendees and speakers praised the summit for the opportunities for open conversation, their different perspectives and the candour that it provided. 

Taking advantage of having the leaders in the financial services industry all in the one room, Deloitte CEO Cindy Hook outlined our responsibility to define the future of financial services. 

Key themes

Opening the summit, she set a challenge; could we use this opportunity to find the right balance between operating within good governance structures, and where necessary challenging the status quo to enable innovation, while ensuring superior customer service and experience.

Three areas emerged as key themes for the diverse range of speakers and attendees at the conference:

  1. balance in regulation, 
  2. the importance of collaboration and innovation, and 
  3. the central role of the customer. 

Closing the conference, I outlined three calls to action based around these areas that, if implemented in Australia, will enable us to bring about a genuinely new era in financial services. These are:

  1. finding the right balance around regulatory focus,
  2. acting on Australia’s position and our capability to lead in financial services innovation and
  3. regaining and ensuring customer trust. 

AFR Banking & Wealth Summit Playback

Regulatory focus

As we balance the increase in regulatory controls and costs imposed by global and legacy issues, we are also experiencing an increase in cases of misconduct that are impacting the credibility of financial service providers. 

The summit raised the question of how to navigate between a command and control approach to regulation and the more supervisory focus of ‘freedom within a frame’. 

Culture was the consensus. 

Consecutive speakers outlined that changes in behaviours, role models, and incentives will give us the right level of regulation, rather than imposed controls. As the chair of the Commonwealth Bank’s risk committee, Harrison Young so eloquently said: “Risk culture in banks is part of the magic that makes banking work.” Adding that: “A healthy risk culture is an invisible friend that tugs on your sleeve when you’re about to do something stupid.”

Culture change will also allow companies to change the profile of their investments in regulatory compliance. We call it ‘increasing regulatory productivity’, or getting a better bang for our buck.

Australia’s role in innovation

It was universally agreed that Australia can – and does – punch above its weight in innovation. Around the world, all eyes are focused on our entrepreneurship capabilities, our innovative ability and our fintech hubs. We need to foster these capabilities and continue to hone our focus to be a global leader in these areas. The ecosystem required to do this is building. 

At the summit, we saw many examples from government, regulators, and many of the large banks and players as to how they are already working with fintechs on joint opportunities. We know the future prosperity of Australia depends on supporting successful collaboration between our innovative entrepreneurs seeking scale, and our own established enterprises seeking acceleration. The challenge for the sector in Australia is to ensure that we can leverage our advantageous position to truly become a global leader in the innovation space. 

In addition, we should remember the different ways that the sector can use innovation:

  • Innovation for growth with new business models
  • Innovation to improve the customer experience
  • Innovation to increase efficiencies.

"It was universally agreed that Australia can – and does – punch above its weight in innovation." - Jesse McWaters

    Winning back customer trust

    If there was a common thread tying the diverse conversations at the conference together, it was to place customers at the heart of all that we do. There is no point in innovating if it doesn’t benefit them. And there is no need for regulation if not to protect them. 

    The challenge is that customer satisfaction continues to be at very low levels, even though all banks, insurers and investment and wealth management players strive to be customer centric. As the new generation of millennials becomes the largest customer segment for many companies, we need to ensure customer trust, beyond just customer satisfaction, becomes the new norm. This will also enable the development of new products and services to reduce friction and pain-points for customers.   

    Next Steps

    We highlighted a particular quote during the event: ‘The best way to define the future is to create it’. The summit provided us with a unique opportunity to come together to talk about the major issues facing the financial services sector. 

    The next challenge is to move beyond discussion to action. We need to continue to build solutions to these issues so we can create the future we want to see for the financial services sector, and most importantly, for our customers. 

    Deloitte is ready to collaborate with the industry to take the next steps to define the new era of financial services. This summit was an important step in outlining new opportunities, and building the capability to collaborate and explore the possibilities together.

    "...we need to ensure customer trust, beyond just customer satisfaction, becomes the new norm." - Arthur Calipo

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