Financial services now face a series of significant milestones, says Samantha Barrass, the FMA’s CEO.
Speaking at FSC’s Outlook 2023 event on Wednesday 25 January, Barrass told attendees from across the industry the FMA must implement “…some critical pieces of new legislation”.
“There’s been lots of time for discussion in recent years, but in 2023 they become real,” she said.
“We are here to support you, as we transition through the introduction of the full financial advice regime, the conduct regime for banks and insurers, and the climate related disclosure regime.”
She said the future is about the regulator and the regulated working together to deliver the right outcomes for all New Zealanders when they interact with financial service firms.
It’s about working together to ensure customers get the right products…
“It’s about working together to ensure customers get the right products, at the right time, and these meet their expectations,” she said.
“Ultimately, it’s about more New Zealanders than ever having justified confidence that the financial services sector is working well for them. It is our departure point for the broad range of issues we will work together with you on.”
Barrass said the regulator has created a range of new roles and changed its leadership structure.
“We’ll bring new people on board, recruiting from both New Zealand and offshore,” she said.
Barrass is also looking for a much closer alignment between the FMA’s teams, enabling decisions to be made quicker, and at the right level.
“I’m looking for shorter decision-making chains,” she said. “We also want to examine the outcomes of our decisions and interventions more, considering fully whether our actions have the desired effect.”
Barrass also said the regulator’s policy of “credible deterrence” is not changing.
“People have heard me say we are not enforcement-led, and the fact is, we never have been, except for in our beginning when we inherited the finance company collapses. Since then, the FMA has applied a range of tools in our work with our licensed population.
“A week ago, we published the outcome of one piece of enforcement [See Cigna to Pay $3.5 Million Penalty]. In that case, the judgment noted the fair-dealing breaches stemmed from decisions made by senior management, rather than systems and controls issues.
…we are looking to the future to deliver CoFI and all the other new regimes, but that does not mean issues that have occurred should simply be ignored…
“Yes, we are looking to the future to deliver CoFI and all the other new regimes, but that does not mean issues that have occurred should simply be ignored. These cannot be brushed aside as legacy issues if customers are still affected, or out of pocket today.
“The roles of both the industry and the regulator are to engage, support and deliver for consumers. Acknowledging and rectifying the issues of the past is part of that.”
Barrass said it’s important firms don’t give the perception they are looking to “wriggle around the borderline of the regulations”.
“Whether it’s a bonus motivating this, a desire to be seen as a high achiever, or the fear of losing a job, it’s just wrong,” she said. “When the FMA talks about outcomes-focused regulation, this is what we mean.
“Conflicted conduct leading to poor customer experiences will be high on my agenda, and the FMA’s Regulatory Delivery team radar.”
Read Samantha Barrass’ full speech here.