Our 11th annual survey of Australian wealth management risk and compliance functions suggests they are at a crossroads.
The sector needs to regain trust: the trust of a sceptical public, and of an industry-funded regulator that is increasingly focused on enforcement. 2018 has seen a wave of regulation in the financial sector, intended to force organisations to act in the best interests of the community. No longer is it acceptable to simply comply with the legislation. There has been a step change in expectations and there needs to be a fundamental change, not only what organisations do, but how they do it. Risk and compliance functions are central to driving this change.
Our survey suggests the strain on risk and compliance functions continues to grow, with resources not rising with these increasing responsibilities and expectations. They will need to evolve to remain adequate and appropriate. As data and technology changes, so will the skillset of these teams.
In response to rising expectations, the wealth management sector has identified automation as an opportunity to do more with less. The potential for technology to assist with the remediation of the underlying themes, at the core of failing to meet community expectations, remains largely unrealised.
We believe that culture lies at the heart of winning back trust. Organisations in our survey have made steps towards creating a more trustworthy culture. However, like the wider finance industry, the wealth management sector must do more to ensure that culture is driving risk outcomes in line with risk appetite. This means providing individuals with the right incentives, then holding them to account for their behaviour.
Partner, Superannuation, Asset and Wealth Management Leader, PwC Australia
Tel: +61 2 8266 7937
Partner, PwC Australia
Tel: +61 3 8603 2160