A Deloitte report - Rebuilding trust in financial services
2020 marks the turning of a decade and, particularly as the global macro-economic outlook and political situation becomes more uncertain, it is an important moment of reflection for the financial services industry.
Trust in the financial services industry remains low, despite the higher regulatory standards that have helped bolster public confidence.
Many of these post-crisis reforms relate to a financial institution's regulatory license to operate - the basic rules and laws within which firms must operate. They are simply what regulators expect of financial institutions.
This begs the question – why does trust in financial services remain so low, even after so much work has gone into strengthening financial institutions’ regulatory license to operate?
This is because much remains to be done for financial institutions to reclaim their social license to operate.
A social license to operate relates to building a robust firm culture that drives good behavior; it also calls for proper governance and accountability within organisations. This means, for example, doing right by customers by properly protecting their personal data and using it ethically as inputs into emerging technologies like artificial intelligence. Finally, it lays out the need to forge stronger communities and societies through forward-looking endeavors like financial inclusion and sustainable finance.
In our 2020 Outlook, we explore how Asia Pacific regulators will focus on these aspects of financial institutions’ social license to operate in the coming year. We look at how this will impact firms’ internal operations, how they harness technology, how they engage with their customers and society as a whole, and what firms need to do to meet these challenges.
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