The Hayne Royal Commission into the banking and financial services industry uncovered plenty of ugliness about Australia's leading financial institutions.
The institutions themselves are still dealing with the fallout of the Royal Commission; class actions, board spills, and "restructure" plans are abound this year.
What was particularly interesting about this Royal Commission was the widespread attention it received from the general public. The banks were slammed in the press, and a new level of distrust appears to have arisen as a result.
But will there be a long-lasting legacy from the Royal Commission?
Annelise Nielsen (pictured) certainly hopes so.
Nielsen has released today her book on the Royal Commission called Money Spinners. It is a deep dive into the history of financial advisers in Australia to its current state, from the beginning of the industry right up to the Royal Commission.
The Sky News Australia host and reporter hopes to ask about where these institutions go from here, and whether the powers that be will continue to hold up a spotlight on the institutions that have taken so many Australians for a ride.
Business News Australia spoke to Nielsen about Money Spinners, the future of the major financial institutions in Australia, and the legacy of the Royal Commission.
Do you think that we should have been surprised by the results of the Royal Commission?
From the perspective I am sitting in now I can see why we probably shouldn't have. But at the time, I absolutely was. I was coming at it from the perspective of someone who was had some limited business experience but was a general news reporter. So, I think it was just kind of eye opening. Industry insider's kind of knew that this was all happening and weren't quite comfortable with it. But it just was the status quo. So that's going to be the question going forward, has anything changed with the status quo?
Well do you think that financial service providers will change? Do you think will anything change as a result of the Royal Commission?
I think there's already been quite significant change. I think the bank's backing out of financial advice is going to be the biggest change. I think there's certainly more scrutiny. And I think, from speaking to people outside of the industry, there's a lot of scepticism around financial advice, people are asking more questions.
I'm interested in what you think of this: we've been noticing how there's a lot of new banks that are digital only banks popping up. Do you think that younger people will leave in droves from the major institutions following these revelations? Do you think we'll see people just flooding away?
Flooding away...that would be quite drastic, and the banks are so established in Australia, but I certainly have heard of more people looking at these new banks. There isn't that complete fear of them? And I think especially my generation, we don't remember what it was like when banks fail. It's not in common knowledge about the huge fund collapses of the 80s and 90s. There is a kind of that ingrained fear about losing everything. So, I think there would be more openness among young people. But we are also incredibly apathetic about our money. People, my age tend to have a really high-risk appetite for credit card debt and things like that. So yeah I definitely see a lot of shopping around, but I can't see banks coming undone.
What do you think is next for the major institutions? Do you think they're going to be more held accountable properly by the powers that be?
For Labor, following the election, it's one of the key things that is still bringing them together in terms of pushing the government on when are we going to see the recommendations for the Royal Commission come through? From the Government's perspective, it is an incredibly huge task to enact. I think it's about 40 pieces of legislation
to get all the recommendations through, they can't really do it with the resources they have now in any adequate time. But I think the pressure is certainly being pulled back onto the regulators. Now, we're seeing new leadership there as well. So, I think that's going to be probably the key conversation for at least the next year.
Do you think that there will be a lasting legacy from the Royal Commission or will the public just stop caring?
The Royal Commission was something where people well outside of business, well outside of finance, were sitting up and taking knowledge. So I think there is that kind of general public dissatisfaction with how things have gone. Things like that do have an impact, but whether there's big structural change still remains to be seen.
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