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$201bn cost of misconduct
More than half of Australia's population has been negatively affected by misconduct and other financial service provider issues, new research has found.
$201bn cost of misconduct
More than half of Australia's population has been negatively affected by misconduct and other financial service provider issues, new research has found.
In light of findings from the banking royal commission, a study by the University of Melbourne has estimated that the total losses from misconduct has been $201 billion over five years.
This figure is based on an average cost to each person affected of $20,473, despite the median cost to each person surveyed sitting at $1,000.
The study’s co-author, the Faculty of Business and Economics’ Carsten Murawski, said many Australians had lost trust in financial institutions as a result of the commission, which was continuing to hold them back from improving their financial situation.
The professor then noted that “about two-thirds of Australians face some level of financial vulnerability and stress”, with financial concerns now the number one concern among young people.
Calls for reform
Professor Murawski’s co-author and Melbourne Law School’s director of banking and finance law, Andrew Godwin, said regulation reform will be a vital step in improving financial outcomes for Australians, echoing the recommendations of the financial services royal commission.
“We need to reduce the complexity of regulation and be clearer about the standards we expect from people working in the finance community by tying regulation more closely to outcomes,” he explained.
The associate professor commented that “financial service providers should be subject to a duty to consider financial wellbeing in performing their functions and services”.
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