Financial Services Capability Statement
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Financial Services Expertise Financial Services Growth Capability statement Financial Services 1 Madeleine Mattera National Head of Financial Services Grant Thornton Australia Changing customer demographics The customer is at the heart of all these changes happening within the financial services sector. To succeed and grow, and demands, a tsunami of organisations need to understand these challenges, think of regulation, new entrants and the their customers and adapt appropriately. The right culture, the impact of technology is transforming right moment to invest in technology and the right competitive strategy will see organisations capitalise on the changing the Financial Services Industry. environment. Drawing on our industry expertise, we will work with you to successfully anticipate and navigate the opportunities and risks of this sector, including regulatory changes and reporting requirements, board strategy, financial audits, risk culture and conduct, technology strategy and business planning. 2 Financial Services Industry trends We work with our clients to understand how industry trends impact them and how they can take advantage of the changes taking place within the banking sector. Increasing investment in technology Governance, culture, remuneration 1 Industry leaders are investing heavily in technology by 4 & accountability either partnering with fintech start-ups or developing In no other industry is the success of an organisation innovations and technology internally. as dependant on good governance and risk culture These technologies are helping banks to track than financial services. customers’ needs and spending patterns. This is The understanding of an organisations propensity to enabling banks to develop a competitive advantage risk will drive the culture of the organisation, and the when developing new products and services. behaviour of individuals, much of what we have seen examined in the Royal Commission. Open banking 2 In 2017, the Australian Government announced the Tsunami of regulation introduction of open banking in Australia. Open 5 Technology, cyber security threats, Anti-Money Banking aims to provide customers with more visibility Laundering and Counter-Terrorism Financing (AML/ and control over their data. CTF), globalisation and the changing way in which An open data system will give more convenience we access banking services has created a tsunami of to customers in terms of managing their finances. regulation. Customers will also be allowed to share data with Ensuring all regulatory requirements are adhered to, other service providers. This will result in customer but also focusing on the customer and growth of the empowerment and competitive challenge. business is a challenge for all banking organisations. New entrants/disruptors Modern slavery, whistleblowing & 3 The banking sector is seeing new entrants from all directions – whether they be international banks, 6 cyber risk regional ADIs becoming national, the merger of ADIs Issues such as modern slavery, whistleblowing & cyber to become larger market players, Fintechs, non- risk are becoming more prevalent. It’s important to traditional ADIs or pureplay digital banks, there is understand the risks for each one, and have effective a raft of competition. Understanding your value internal controls in place to prevent and manage them proposition and the needs of your customer base effectively. is critical to success in this constantly changing competitive landscape. Globalisation 7 Todays dynamic market place demands that financial service institutions provide technologically advanced services that are reliable and globally connected, operating across borders seamlessly. Financial Services 3 The regulatory environment Royal Commission Anti-Money Laundering and Implementation Roadmap Counter-Terrorism Financing In September 2019, the Federal (AML/CTF) Government released its implementation AUSTRAC has widened its enforcement roadmap accepting all 76 of the Royal activities on reporting entities subject to Commission’s recommendations plus the AML/CTF Act; in particular, where they committing to an additional 18 actions. have concerns about systemic failures to These are progressing, and are expected address money laundering and terrorism for completion by the end of 2021. financing risks. AUSTRAC will soon make it compulsory for all AML plans to be reviewed by an independent party every two years. BEAR Banking Executive Accountability Regime This means reporting entities, those (BEAR) commenced on 1 July 2018 for providing designated services such as large authorised deposit-taking institutions financial services, gold bullion dealers, (ADIs) and 1 July 2019 for medium and gaming services, and payroll services, small ADIs. The regime establishes should ensure their money laundering and accountability obligations for ADIs and terrorism financing (ML/TF) risks are clearly their senior executives and directors. It also identified, articulated and appropriately establishes deferred remuneration, key managed. personnel and notification obligations for We work with clients to ensure their AML ADIs. BEAR will become ‘EAR’ as it extends plan is robust and exposure points are to insurers and superannuation funds as addressed, including: well as APRA and ASIC executives. • Undertaking risk assessments • Writing AML programs • Reviewing internal controls and risk CPS 511 profile APRA has proposed a significant new • Assessing third party suppliers exposure prudential standard on remuneration – points CPS 511 which is set to impact insurers, • Reviewing employee policies and training superannuation funds, credit unions, and • Monitoring enforceable undertaking mutual banks. • Remediation post-issue. Focus on GCRA In November 2019 APRA published its plans to significantly raise the standards of governance, culture, remuneration and accountability (GCRA) across financial institutions. 4 Financial Services Supporting future growth Sustainable growth We make it our business to understand your business and take a hands-on and practical approach to the design and delivery of all advice, so it reflects your growth plans. Above all, we are committed to providing you with the advice and support you require as your business grows. Tax Advisory Business Risk Our Tax team offers full-service tax support Risk management is becoming increasingly designed for management of tax issues. important in the financial services industry. Contact: Himashini Weeraratne Our team of Business Risk professionals has experience working with clients to identify, evaluate and improve areas of exposure or Audit & Assurance weakness. Our team has extensive audit and assurance Contact: George Sutton experience for small to mid-sized financial institutions, from credit unions and neobanks Internal audit & governance to superannuation firms and insurers. As governance, culture, remuneration and Contacts: Madeleine Mattera, Claire accountability are increasingly enforced by Gilmartin, Darren Scammell, Matt Leivesley, the regulators, financial services institutions Matt Adam-Smith, Bronwyn Wundersitz rely on internal audit and governance more than ever. We have experience working with Human capital a broad range of organisations to ensure the We partner with organisations across right frameworks are in place. Australasia to ensure that they are equipped Contact: George Sutton with people strategies, initiatives, processes, systems and structures to help realise Technology risk & cyber risk strategic ambitions. Every business is a target for cyber risk. Our Contact: Matt Croxford technology & cyber risk team provide detailed, actionable insight that incorporates industry GST best practice and standards so you can We understand the GST issues affecting strengthen your cybersecurity position and financial services institutions and how to make better informed commercial decisions. manage them through your business lifecyle. Contact: Matthew Green Contact: Andrew Barrah Whistleblowing and modern slavery Our specialist team works with organisations to assess their risks and internal control environment’s and supports clients in preparing Modern Slavery Statements. Contact: Katherine Shamai Financial Services 5 Our offerings With a team of specialists focused on providing positive outcomes to our financial services clients, we have a broad range of experience across the sector, in all areas of tax, advisory and assurance services. Achieve sustainable growth Optimise operations Manage risk and regulation • Strategy development, review and • Profit/performance improvement • Governance facilitation • Operational restructuring • Risk review and strategy • Feasibility studies and market • Portfolio benchmarking and review • Regulatory review and reviews • Outsourcing recommendation • Business planning • Interim management solutions • Financial audit • Group rationalising or restructuring • Tax structuring: local and • Control reviews • Efficient structuring international • Internal audit • Business model optimisation • Project management cycle reviews • Whistleblower services • Data analytics • Efficiency/best use reviews • Anti-money laundering (AML/CTF) • IT requirements • Technology solutions services • Debt advisory • Payments solutions • Fraud strategy • Fleet optimisation • Forensics Finance growth • IT security review, cyber security • Capex cost/benefit analysis Manage talent for growth and strategies under CPS 234 • Solvency advice • Culture review • ICAAP reviews • Financial restructuring