Feb 04 2019
According to industry research organisation IBISWorld, the banks and other major players in the financial services sector will need to earn back the trust of the public in order to recover from the fall out of The Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry - the final report from which will be released this afternoon.
Key findings include:
- The Finance subdivision is significant to the Australian economy as firms and financial institutions in the subdivision control a vast value of assets.
- Ongoing macro-economic and geopolitical changes have sent waves through the weakened financial system and challenged global financial markets with uncertainty over the past five years.
- The US economy’s slow recovery and concerns about Chinese economic sustainability have affected Australia’s economic performance over the past five years.
- Domestically, declining private capital expenditure has led to lower demand for credit, which has put further pressure on subdivision revenue.
- The declining cash rate has been the main factor causing subdivision revenue to fall over the past five years.
“There has been no shortage of misconduct revealed by the Royal Commission so far, including conflicts of interest arising from the remuneration structure of mortgage brokers, fees that have been charged for no services provided and a breach of responsible lending standards that led to people being issued credit that they could not afford, to name but a few,” said IBISWorld Senior Industry Analyst, Tommy Wu.
Some of the banks have already been pursued by the Australian Securities Investment Commission (ASIC) over the past year, but the full extent of the fallout will not be known until the final report is released. Regardless of the findings, it will take some time before the recommendations become law, as they need to be pass through Parliament.
“While the major banks and other financial institutions have already tightened lending standards and made credit more difficult to access since the onset of the Royal Commission, they will need to work very hard to earn back the trust of the public in order to recover,” said Mr Wu.
For more information and analysis, download IBISWorld’s Industry report Finance in Australia.
For more information, to obtain industry reports, or to speak with an analyst, please contact:
Strategic Media Advisor – IBISWorld Pty Ltd
Tel: (03) 9906 3641 Mobile: 0422 773 995