Conduct, governance and financial inclusion will be among the key priorities for the Reserve Bank’s Council of Financial Regulators (CoFR), which has announced its planned areas of focus for 2020.
The CoFR has identified seven different work streams for the coming year, with each one being led by a separate CoFR agency. All together, they will aim to make a “coordinated effort” to tackle issues from across the financial system.
The Commerce Commission will support consumer access to financial services, particularly working with hard to reach communities, and the FMA will continue its work on conduct and governance, maintaining its oversight of banks and insurers and ensure their ongoing progress in the identified areas.
Climate change, fintech, credit unions, residential property insurance and the review of the Regulatory System Charter will be the other key areas of focus for the CoFR.
Speaking to the FSC, FMA director of regulation Liam Mason said that the work conducted with banks has been largely positive, with visible improvements being made to sales incentives and customer focus. He says its review of life insurers has been “more complicated”, and the FMA will soon be looking to speak to general insurers about their own checks and processes.
“Earlier in the year, we announced where we were with the banks who participated in the conduct and culture review, and we were able to say that we’ve had a positive response from all of them,” Mason explained.
“We got a plan from each of them around how they were going to address the issues that we raised, both individually and collectively. We will be working with them, and that’s something we’re very much integrating into the ongoing supervision of these firms.
With insurance, it’s going to be a more complex conversation.”
Mason says insurer responses indicated “greater challenges” when it comes to adjusting remuneration models, and how insurers work with intermediaries. He says the FMA will also be having a conversation with the government around financial services regulation.
“There is a need for highlighting to the government that there is a gap in the regulation,” he said.