FMA Chief, Rob Everett, says he hopes the banking and life insurance sectors have pulled their collective heads out of the sand when it comes to conduct and culture.
In a newsletter update on the FMA’s continuing conduct and culture review of NZ-based banks and life insurers, Everett said he hopes all parts of the industry now understand the importance of good conduct.
He said the situation in Australia and the FMA’s recent collaboration with RBNZ and the Commerce Commission, reminded him of discussions had during its Conduct Guide 2017 consultation phase, when the regulator got push back from some parts of industry.
“We heard that we were trying to expand our remit into areas we did not license, such as retail banking, consumer credit and insurance,” he said.
Everett continued, “It was also said we were trying to “impose” new requirements, with no legal basis, for how financial services firms treat their customers.”
He said the regulator acknowledged at the time that the Conduct Guide was a guide and not mandatory, but that all providers of financial services and products were encouraged to review their conduct against it.
“I hope those parts of the industry have now well and truly pulled their heads out.”
“As I said at the time, AFAs have a Code of Conduct and I saw no reason why the rest of the industry should not operate under similar standards,” said Everett.
“We have more tools to influence FMA-licensed firms, so this was a call to action for the rest of the industry.”
He said the review in progress has reinforced what the FMA already knows.
“Some parts of the industry understood the Conduct Guide’s call to action, and have already spoken to us about the internal processes they have underway,” he said.
“Others stuck their heads in the sand, believing our guidance was not “relevant” to the areas of their business we don’t license. I hope those parts of the industry have now well and truly pulled their heads out.”