EOFY Wrap by Kate

I have a confession to make. I have started and re-started writing this piece over a dozen times, trying to work out how best to reflect on the last financial year. It is difficult to encapsulate how much has changed – and yet the challenges our industry faced pre-Covid remain the same: digital technology, ‘big ticket’ enforcement action, and a constantly shifting regulatory landscape. Of course, these challenges now exist against a backdrop of global economic woes, local inflationary pressures and a new set of political priorities.

It’s enough to make even the most optimistic of CEOs a little cautious about predicting what’s to come.

However, one of the joys I have found in leading Financial Education Professionals over the past 10 years is that, with the right team, you can withstand everything that is thrown at you. And so, I put the call out to our team to seek their thoughts on the year that was, how we (as a business and as a member of the wider financial services industry) responded, and what opportunities the next twelve months may bring.

Digital technology and data

An area of particular interest to our team and our growing cohort of fintech customers is the changing face of Australia’s payments sector. To ensure regulatory certainty and consumer protection, various initiatives have explored how best to licence and supervise the payments and fintech sector, including plans to bring Buy Now Pay Later providers into line with other regulated credit providers.

Coupled with this, the New Payments Platform functionality is growing (with the introduction of QR codes and PayTo) and the federal government has introduced legislation into Parliament to include “write access” in the Consumer Data Right (CDR) regime. In June 2023, Treasury released its Strategic Plan for the future of Australia’s Payments System detailing the types of payment functions earmarked for inclusion in a new licensing framework for payment service providers. FEP has long supported payments solutions providers and fintechs and looks forward to seeing how policy for this sector evolves.

Of course, with the good comes the bad, and cyber scams and data security are forefront of everyone’s mind. Regulators have taken steps to address these concerns, including several reports, guidance, and speeches from APRA and ASIC leadership on the issue. The OAIC has also been investigating various data breaches, particularly the Optus and Medibank breaches, and a review into our Privacy laws is underway.

Enforcement and accountability

On the enforcement front, there has been a strong focus on rectifying AML/CTF failures and ensuring compliance with the DDOs. ASIC, APRA and AUSTRAC have been busy pursuing action against a number of big names, including Westpac, BOQ, Crown Resorts and PayPal.

These cases have highlighted the benefits to be gained from having clearly defined accountability frameworks within an organisation, including faster decision-making and problem resolution, and greater care and diligence at a directorial level.

To be effective, accountability frameworks need to be transparent, regularly updated and consistently monitored. They also need to be aligned with your business capabilities. Training is naturally central to this, and we believe with the right education partner, businesses can create an accountability framework that not only mitigates bad behaviour, but improves workplace culture.

Regular readers of our Insights blogs will know that we are champions of accountability and capability building. The implementation of the Financial Accountability Regime and the general focus on corporate governance presents an opportunity for all organisations to evaluate how effectively capability building is being conducted across the whole business, not just among levels where standards of capability is legislated for (directors and accountable people).

We are also looking forward to the extension of the AML/CTF regime to certain high-risk professions. This is work that is long overdue and action on this will finally see Australia catching up with the rest of the world.

Legislation and regulation

Part of our role as a financial educator is to ensure we are across any and all regulatory developments that impact our customers. Over the past twelve months, we’ve seen new guidance on crypto investing and reportable situations, draft legislation to facilitate competition in clearing and settlement services, and consultation on the tax treatment of superannuation.

Looking ahead, we expect to see closer scrutiny of ESG-related reporting and disclosures, guidance on operational risk management from APRA, continued pressure on insurance claims practices, and industry consultation to support the implementation of the Quality of Advice Review reforms (to name but a few).

All of these developments will be reported in our regulatory updates, which you can subscribe to here.

But updates are only one part of the story. Our courses undergo constant refinement to ensure they are fit for purpose, which includes responding to regulatory change, global impacts and local issues. We go beyond simply listing the ‘dos and don’ts’ – we aim to provide our learners with a clear context in which to absorb and interpret the rules.

We want to support our customers to create an environment where professional development is valued and encouraged. Whether we achieve this through tailored, holistic training frameworks, or simply by ensuring our CPD library is regularly updated with topics that are relevant and timely, we are consistently checking-in with our customers to ensure we are meeting their needs.

Industry tides

Of course, the major political issue on everyone’s lips has been inflation and the increasing cost of doing business. It’s true that we are seeing businesses exit the market, as budget pressures take their toll. But industry movement is nothing new. Whatever the trigger – regulatory reform, economic concerns, consumer trends – the financial services industry tides will continue to turn. The key to staying afloat is to hold true to your values.

For FEP, this means:

• Remaining curious about the world in which we operate, always seeking out innovation and emerging trends that will drive the next wave of industry development.
• Delivering high quality, fit-for-purpose workplace training backed by open and transparent service that puts the customer first.
• Adapting to change swiftly, ensuring our customers are up to date with the latest regulatory positioning and best practise approaches to doing business.
• Creating opportunities for our industry to evolve, by challenging the status quo and growing our collective capability.

I look forward to another year of collaboration and seeing what 2023-24 brings for us all. Thank you to our clients who have allowed us to share their journey, and we remain as committed as ever to partnering with you to conquer and excel again next year.