With governance the new catchcry for the banking and finance sector this year, how can banks and financial institutions demonstrate to customers they are making authentic changes? Should copyright be considered one of the many areas of non-financial risk that banks should be addressing?
Financial commentator Alan Kohler discusses the fallout from the banking Royal Commission, courtesy of Copyright Agency.
2018 was a year of revelations and recriminations in the Australian banking and finance sector. What are your predictions for the sector in 2019? Will reputations recover?
I think it will take longer than one year. I suppose time heals all wounds, but in this case, I think action is required as well.
With governance the new catchcry for the sector this year, how can banks and financial institutions demonstrate to customers they are making authentic changes?
What’s required, I think, is for banks to change their business models and to get out of the business of financial advice – to stick to their banking knitting. Advice must be independent – it cannot be provided by an employee of either a bank or a wealth manager. As long as banks try to provide client-focused advice, they will get into trouble.
I think all levels of banking and finance staff have strongly felt the effects of the criticism and scrutiny of the banking sector. Most people’s jobs are important to them – they want to believe in the company they work for, and they want to do the right thing.
To find they are working for organisations that have been put into such a negative light would be very hard to take. With the right leadership and direction this can hopefully make a difference.
Commissioner Hayne’s report discussed the importance of managing non-financial risks. The report states (p404, 3.2.2.) “When financial services entities have considered risk and risk management, they have focused on financial risks, rather than non-financial risks. Mr Comyn said that one of the key things that CBA had learned from the report of the Prudential Inquiry was that there was ‘[n]ot enough capability in the management of non-financial risk, particularly in operational risk and in … compliance’. He acknowledged that CBA had ‘an enormous amount of work to do to improve our management of non-financial risk’. Dr Henry also accepted that at NAB there was ‘insufficient attention given to the management’ of non-financial risks.”
In your opinion should copyright be considered one of the many areas of non-financial risk that banks should be addressing?
Yes of course. The payment of fees for using copyright material is very well understood by the Australian community and is fair. It demonstrates respect for others’ property and expertise. Businesses expect to be able to share content, such as intelligent business analysis, journal and newspaper articles, graphs and reports to bolster business profits and so it’s only right that fees should be paid to ensure creators – such as journalists, authors (such as economists), publishers and others are adequately compensated. It’s about adhering to copyright laws and maintaining our economy. Many creators, whether they are publishers, authors or researchers, are actually small businesses.
The finance sector still relies heavily on using data and critical insights from the mainstream media. How important is it that Australia has a thriving and robust local media sector?
A healthy media is obviously very important to Australia.
There have been enormous changes brought on by the internet, in four waves:
The first destroyed the classified ad revenue of newspapers and the second has destroyed the display ad revenue as well. The third is in the process of destroying free-to-air TV and the fourth will eventually destroy radio. The other thing the internet has done is to provide a free platform for everyone, lowering the publishing barrier to entry to virtually zero, and causing an explosion in competition for peoples’ time.
So, as revenues have dropped, the traditional media are looking for new ways to thrive, and at the same time, there has been an enormous rise in ‘fake’ news. A reminder again of the need for a robust and diverse media here.
You’re a Copyright Agency member – and your past newspaper proprietor-employers are also members – earning copyright royalties for articles reused by the business, government and the education sectors. How critical is copyright to maintaining Australia’s ‘intelligence’ economy?
Copyright is vital – the last defence against barbarian hordes. I only hope it holds. My main concern is that China is destroying it. When the world’s second most powerful economy, possibly soon to be the most powerful, completely disregards copyright, what hope has the world got?
You have been a freelance journalist for some years, with your website The Constant Investor and its associated podcasts and resources across social platforms. What are the risks and benefits of being a publisher in your own right?
The benefit is the freedom to be your own boss, but it’s really, really hard. There are so many free things for people to read, watch and listen to that it is hard to get anyone to pay, and Google and Facebook are scooping up so much of the digital ad revenue that there is very little of that left.
Would you have developed The Constant Investor if copyright laws did not exist?
Probably, but it would have been even harder I suspect.
What drives you on a daily basis to keep generating incredible content?
Curiosity, mainly, and an unflagging desire to serve.
The Copyright Agency has a campaign called This Book/Song Changed My Life – which aims to remind us that fantastic books and songs can be truly life-changing – and copyright underwrites their creation.
What book or song changed your life and how?
So many songs, so many books! I suppose I would nominate Joni Mitchell’s album “Court and Spark”. I was 22 and had spent my life up to that point listening to the Beatles, Led Zeppelin, BB King and stuff like that, but Joni made me see music as poetry for the first time. I then started listening to Leonard Cohen and Bob Dylan for the first time. So… Joni Mitchell changed my life.
Original Source: https://www.copyright.com.au/profile/alan-kohler/