The chairman of the Australian Securities and Investment Commission (ASIC) has warned that Australia’s banks have not gone far enough to eliminate harmful subcultures that led to scandals such the ongoing bank bill swap rate allegations.
“Stop saying it’s a few bad apples,” Greg Medcraft said in an interview with the
Australian Financial Review. “At some point you've got to look at the damn tree and say, what's wrong with us as an organisation? That's what I am saying to these guys.”
In the midst of the “troubling” list of issues targeted by ASIC last year, some banking subcultures were failing to get the message about living up to the public’s expectations, Medcraft said.
While there had been a push to improve culture from the top, this was not moving from the boards and executive teams down to the lower levels of management, he added.
“I think the problem is that by the time it gets to the middle it’s white noise. Many big banks have subcultures … and the problem is breaking through,” he told the paper.
“Every single board is focused now on culture. They now know that getting a good culture is not about employing an army of compliance people, it's actually about making sure you've got the right people and setting the tone from the top.
“But the hardest thing for many of them is to recognise if you've got a subculture that is in conflict with the values you want to drive as an organisation.”
Medcraft warned that in the age of fintech, the price could be high for the banks if customers continue to be disappointed with their performance.
“These days, the bigger that gap in trust the more prone you are to being disrupted.”
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