Culture, Conduct & Putting Customers at the Centre: The Hayne Royal Commission 5-Years On

February 2024 marks five years since the final report of the Royal Commission into Misconduct in the Banking Superannuation and Financial Services Industry was handed down. Today, the Australian banking sector looks very different from the one that faced the excoriating experience of the Commission’s six rounds of hearings, during which the conduct and culture of the financial services sector were laid bare. For those executives who took the stand during the public hearings to answer probing questions, scars are etched on memories and important lessons have been learned.

The regulatory change that has occurred over the last five years has been vast and it has been driven from three sources: the recommendations from the Royal Commission itself; additional regulatory reform the Government has since embarked on in light of community and stakeholder concerns; and the Australian Banking Association’s (ABA) complete re-write of the industry’s self-regulatory Banking Code of Practice. The Royal Commission recommended major reforms to conduct, culture and the sale of financial products. In response, the Government has legislated a raft of new laws, implementing such reforms as: “Design and Distribution Obligations” requiring banks to undertake target market assessments for all credit products; new “Product Intervention Powers” giving the Australian Securities Investments Commission (ASIC) the ability to halt the sale of products they deem harmful; and the banning of unsolicited offers of credit and credit increases.