To combat the public’s corroding trust in those who work in finance, professionalism needs to be improved, he says
While people still trust in financial infrastructure— the payment systems and exchanges that hold our money— the “sustained degradation” in the trust of people— the directors, auditors, mortgage brokers and financial planners who work in the system— could have a “catastrophic” result, said ASIC’s new chair James Shipton during his opening address at the ASIC Annual Forum on Monday (19 March).
“Since trust in the financial infrastructure appears to be sufficient, the sad conclusion must be that Australians don’t look to people in finance with enough trust,” he said.
The finance industry must therefore make itself more worthy of people’s trust, Shipton said.
To be trustworthy, one must earn it by being competent, caring and ethical, especially when no one is watching.
“I am suggesting that we need greater levels of professionalism in finance,” he said.
To rebuild trust in finance, the industry must recognise that “every cent in the financial system is other people’s money” not just numbers on a computer screen or “just a means to receive a commission or bonus”, he said.
Behind those numbers are everyday Australians, and real people’s lives are in the balance.
He said those working in finance too often get caught up in the complexity of their specialisation, or in earning their commissions, that they lose sight of finance’s broader purpose.
“We must never forget that, ultimately, the financial system provides vital functions for the economy and for society. And if we get things wrong the result could very well have a devastating impact on real people,” he said.
Increasing professionalism will require a range of solutions across the entire financial ecosystem, and ASIC is not exempt, he said. Industry— and those who work within that sector— will need to take more of a leadership role, but in this is an opportunity to make self-regulation work.
