ASIC calls for cultural shift within financial industry

ASIC calls for cultural shift within financial industry and “needs to happen now”
The Australian Securities and Investments Commission has stressed the need for a cultural shift within the industry to start without delay.

The Age reported that the boards of a number of investment banks had been issued with reports on potential deficiencies in their corporate culture.

ASIC commissioner Greg Tanzer said the regulator's investment banking team had recently delivered a targeted questionnaire "to a number of investment banks to better understand their appetite, attitude and approach to conduct", not revealing the investment banks in question.

"There is a need for a cultural shift in the financial industry – and that it needs to happen now," Tanzer said. 
​The questionnaire aimed to help ASIC identify broader conduct risk in the banks.

RBA warns investors on withdrawing funds in stressful times
Reserve Bank of Australia deputy governor Philip Lowe has warned investors in asset funds that they could risk frozen funds in a crisis, according to an article by the Australian Financial Review.

"Many collective investment vehicles have the ability to offer a high degree of liquidity despite the bulk of the underlying assets being illiquid," Lowe said. "But in stressed conditions, this ability can disappear quickly.”

He said investors and fund managers need to have a clear understanding of this to avoid an investor panic, referring to a previous example when Australian investors were panicked into pulling their money out of a "collective investment vehicle."

At the height of the 2008 crisis property-related trusts froze around $30 billion when investors panicked about the security of their savings. Lowe said it underlined the importance of investors understanding the "nature of the liquidity promise being made."

"Many of these vehicles allow investors to redeem their funds at short notice, even though the underlying assets are not particularly liquid, and are likely to be even less liquid at a time when there are large-scale redemptions. The underlying concern is not that these vehicles will be unable to meet their obligations to their investors, but rather that they could serve to spread distress across the broader financial system,” Lowe was quoted as saying by the Australian Financial Review.

$75 million tech upgrade by leading banking and insurance group
Suncorp Group’s new technology program comes with a $75 million price tag but will give back $170 million in benefits by 2018, according to an article in the Sydney Morning Herald.

Group CEO Patrick Snowball said the group was focussing on optimising the company's operating systems and making improvements across claims processing, motor vehicle repairs, home repairs, procurement, technology and business intelligence.

"I have always said there is more gas in the tank and beyond the next wave of efficiency gains we can now demonstrate the benefits of our diversification," Mr Snowball said.

CEO Suncorp Bank John Nesbitt said the platform is about flexibility, automation, data quality and cost reduction for the division. 

GPT Group boss, Michael Cameron will replace Snowball after he retires from Suncorp Group later this year while the group's new banking platform, Ignite, is set to be completed by June 2016.