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Don’t count compliance as a cost

Treating customers fairly should not be seen as a burden by financial institutions.

This was one of the core messages from the ’Meet the Regulators’ segment, during last week’s Annual ASIC Forum.

On the Meet the Regulator’s Panel on the second day of the Forum, ASIC Commissioner Cathie Amour argued the question of fairness was not one that should be up for debate.

“I think it's a crazy notion that treating your customers fairly is a compliance cost. For goodness sake, you are in business to work with customers—to earn revenue with them. So, I really think it’s an awful situation that we are thinking that way,” Amour said.

The Commissioner continued that there was a certain expectation from the regulator that the senior leadership of ASIC’s regulated entities were accountable for the fair treatment of their customers.

“That may mean they need to make an investment in sound framework to address the managers’ risk to go with a business in the US. But there is an appropriate investment in managing non-financial risks in compliance with the law and fairness obligations that is just good business practice.”

Regulatory burden?

While compliance with regulatory obligations should be seen as good business practice, regulators have been working to streamline regulator obligations and ensure there is not undue regulatory burden.

Speaking at his second AISC Forum, ASIC Chairman James Shipton said, “We are certainly attuned to not overburdening the system, and we are working closer with our colleagues at APRA to make sure we are efficiently-seeking information from the financial sector.”

One of the tools the regulator addressed was the use of the close continued monitoring (CCM).

Sean Hughes, ASIC Commissioner and former GRCI Director, told attendees that finding the problem points and where organisations might be vulnerable is one of the benefits of the CCM.

“We can't give you a pass complying with the law. That's not what we do. All we can do is understand how your business models adapt—that is, how intuitive, flexible and agile it is to address those challenges around compliance. But customers shouldn't be seen as an add-on. They are why you're in business—to serve and support and make your customers successful, and hopefully to enhance their financial success as well.”

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