A speech by Greg Medcraft, Chairman, Australian Securities and Investments Commission at the launch of Governance Institute of Australia’s inaugural Ethics Index (Sydney, New South Wales) 20 July 2016
Introduction
Thank you for inviting me to speak at the launch of the Governance Institute’s inaugural Ethics Index. I congratulate you on this important initiative.
We are at an exciting time in history, when technological innovation is rewriting almost every industry including the financial services industry.
Very recently, Max Levchin, PayPal co-founder and former chief technology officer, said that his new fintech start-up, Affirm – which offers flexible and fast loans to consumers and is pitched as an alternative to a credit card – could challenge global financial institutions with a new model designed to better align with customer interests. Regardless of whether this particular vision succeeds, it is evident that new disruptors will continue to challenge incumbents.
In a new Telstra report, Millennials, mobiles and money, it was stated that, ‘millennials may be the first generation to live their lives never requiring nor engaging with a traditional institution and only ever associating the word “branch” with a tree’.
Social licence, social media and the 24-hour news cycle are also changing customer expectations and the way customers behave. Companies need to live up to the standards we expect, not just the laws we enact.
The Telstra report says that ‘the threat from fintech is significant’. It notes that two-thirds of millennials prefer to receive advice on financial products and services via a digital platform, and that automated robo-advice or digital advice is perceived to be more independent and preferred. In this environment, building and maintaining a culture that your customer can believe in is imperative. Firms that do not have a good culture risk losing their customers to firms that do.
Today I’d like to you talk about:
- corporate culture and how this relates to corporate values and ethics
- why ASIC is focusing on corporate culture, and
- key points from the Ethics Index that are of interest from a regulatory perspective.