A risk and compliance hub has arrived in Sydney this week with the aim of helping insurers lift standards around regulation, remediation and risk culture.
Launched by professional services giant Accenture, the Innovation Centre for Risk and Compliance comes as the industry faces an increasingly complex and challenging operating environment.
Tales Lopes – Accenture’s finance, risk and compliance lead in Australia and New Zealand – cited changing attitudes and new regulations as two driving factors behind the new centre.
“Regulators are shifting their focus from ‘tell me’ compliance, based on adopting the right policies, to ‘show me’ compliance based on evidencing outcomes, with an uninhibited use of fines,” he said.
“Several major new regulatory initiatives are also on the horizon (e.g. IFRS 17) mandating additional investment of resources and focus.”
Unsurprisingly, Lopes also pointed to the Royal Commission as a catalyst for launching the innovation hub.
“Recent and ongoing Royal Commission findings have further highlighted systemic issues and failings among institutions,” he told Insurance Business. “Customer and regulator trust is at an all-time low, further cementing the importance of getting future risk, governance and compliance initiatives right to regain trust.”
Recent events in the Australian market will also contribute to new standards, he said, noting APRA’s prudential report.
“Under this context, financial services organisations will need to enhance aspects related to accountability, conduct, culture, and reporting as part of their compliance transformation,” he said.
Increased transparency is also set to be a major theme within the hub and Lopes said many of the industry’s issues – including flawed compliance structures, the mis-selling of products, and limited regulatory due diligence – could all have been addressed through greater transparency.
“In addition to transparency, there is also a need for greater accountability and involvement of the board and senior executives,” he said. “Senior leaders must act as role models, displaying the right conduct to foster a risk culture that prizes transparency and accountability.”
