Apply Principles of Professional Practice to Work in the Financial Services Industry

Student Name……………..…………………..

ID………………………………...

Unit No: FNSINC401A

Apply Principles of Professional Practice to Work in the Financial Services Industry

ASSESSMENT EVENT

Event 2 of 3 (50% of total assessment mark)

PERFORMANCE MEASUREMENT

Results will be reported as:-

Competent or Not Yet Competent (Grade Code 42)

Plagiarism Declaration

I have read the Student Service Guide under Student Responsibilities to “… not engage in plagiarism, collusion or cheating in any assessment event or examination”.

The answer below is one point of view only and the student may provide a different one which is still correct - this should be marked on its merits.

Part 1(15 marks)

Question a – General description of Westpac(3marks)

Westpac Banking Corporation (‘Westpac’) is Australia’s first and oldest bank (established in 1817 as

the Bank of New South Wales). It has been known as Westpac since October 1982. Westpac provides

a number of financial products including:

Banking products – payment facilities, transaction accounts, deposit products

Insurance products – general and life

Superannuation

Financial markets

International products – foreign exchange accounts, contracts

Westpac operates under the following brands;

Westpac Retail & Business Banking is responsible for sales and service for small-to-medium enterprise customers and commercial customers in Australia under the Westpac and RAMS brands;

Westpac Institutional Bank delivers a broad range of financial services to commercial, corporate, institutional and government customers either based in or with interests in Australia and New Zealand.

St.George Bank is responsible for sales and service for, business and corporate customers in

Australia;

BT Financial Group (Australia) is the wealth management arm of the Group also includes the wealth division of St.George. BTFG’s brands include Advance Asset Management, Asgard, BT, BT Investment Management, Licensee Select, Magnitude, Ascalon, Securitor, and the advice, private banking and insurance operations of BankSA, St.George and Westpac RBB;

New Zealand Banking is responsible for sales and service of banking, wealth and insurance products for consumers and small to medium business customers in New Zealand.

Question b – External forces that impact on Westpac(3 marks)

There are a number of external forces that can affect Westpac, including:

Value of the Australian dollar – can affect all areas of business that involve international

transactions. In particular it can affect Westpac’s trading in foreign currencies.

Interest rates – if rates are unstable this could affect Westpac’s lending margins.

The fiscal and monetary policies - of the government, Reserve Bank of Australia and market pressure have an impact on the type of financial products that customers favour during the different stages of the business cycle.

Other important ones:

Globalization -the connectivity, independence and interdependence of the world markets and businesses, made possible by technologies, which allow increased travel, communication and business.

Convergence- the various financial players, banks, insurance and superannuation organisations, grouped together under the financial service industry umbrella.

Technological changes

Innovation- has been made possible due to globalization and technological advances. The financial sector is evolving and is able to offer innovative new products, increased productivity and efficiencies. These innovations have seen the need for increased regulations and guidelines to ensure that the financial services industry is prudent and sound.

Question c – Legislation, regulations and codes of practice that affect Westpac(3 marks) Westpac is regulated by the Corporations Act 2001 and amendments to the act in the form of the

Financial Services Reform Act.

Financial Transaction Reports Act 1988, and Anti-Money Laundering and Counter-Terrorism

Financing Act 2006.

The Competition and Consumer Act 2010 (also has an impact on the business, both in the provision of financial services, but also in the other parts of the business, such as unconscionable conduct in the supply of goods and services.

The Occupational Health and Safety Act also has an impact on the way the business operates and staff training.

The Income Tax Assessment Act applies to bank.

The bank must comply with the provisions of the Privacy Act and ensure that customers details are secure.

As a provider of consumer credit the bank must comply with the National Consumer Credit

Protection Act 2009

The regulatory bodies that oversee the financial services sector are the Australian Prudential

Regulation Authority, Australian Securities and Investment Commission and the Reserve Bank.

Westpac is a member of the Australian Bankers Association (ABA) and all members of the ABA abide by the Code of Banking Practice which is a voluntary code of conduct. The Code sets standards of good banking practice for banks to follow when dealing with individual and small business customers, prospective customers and guarantors.

Question d – Westpac’s internal philosophies and ethical standards (3 marks)

Westpac’s vision is to be one of the world’s great companies, helping its customers, communities

and people to prosper and grow.

Westpac aspires to:

have a family of much loved financial services brands;

be recognised for enduring customer relationships;

be a place where the best people want to work;

be a leader in the community; and be a great investment.

Westpac’s mission is to earn all of its customers’ business. Westpac’s focus is on:

delighting its customers;

having the right people in the right roles; and

its reputation.

Westpac believes that the following values will help it deliver its strategy:

working as one team; delighting customers; acting with integrity; achievement; and valuing each other.

Question e – West pac’s internal policies, pro cedures and guidelines(3 Marks) The Westpac Banking Corporation Code of Conduct is the foundation of their ethical and compliance

policy and the practice applies (without exception) to all directors, executives, management and employees. The Code of Accounting Practice and Financial Reporting complements the code of

conduct. The activities covered by the code are:

Our principles for doing business

Our code of conduct Conflicts of interest New issues policy

Whistleblower protection policy

Code of accounting practice and financial reporting

Market disclosure policy

Guidelines for non-audit services

Privacy policy

Westpac Economic and Trade Sanctions policy

Westpac Group securities trading policy

AML - Westpac Group policy

Westpac Group Economic and Trade Sanctions Policy

Corporate Governance Statement

Westpac's Constitution

Board charter

Board tenure policy

Non-executive director's standard letter of appointment

Definition of independence

Policy for appointment of directors to subsidiary companies

Director appointment policy

Board committees and charters

Board committee membership

Board Audit Committee Charter

Board Risk Management Committee Charter Board Nominations Committee Charter Board Remuneration Committee Charter Board Sustainability Committee Charter Board Technology Committee Charter

Part 2

Specific strategies used by Westpac to ensure conformity to the financial service industry legislation, policies, procedures and guidelines (15 marks)

a. Internal and external audits(3 Marks)

Westpac comply with Australian Accounting Standards, ASX requirements and the Corporations Act. They are required to undergo an external audit and they support this with the activities of internal audit. The Annual report is evidence that these processes are in place and that the Board and management are actively embracing their audit obligations.

Westpac has a Board Audit Committee (made up of nine independent, non-executive directors) that oversees matters including the financial statements and financial reporting systems, the external auditor’s qualifications and performance as well as all compliance and regulatory requirements. The current external auditor is PricewaterhouseCoopers and they were appointed at the 2002 Annual General Meeting.

The internal audit process within Westpac is called Group Assurance and it includes “an independent and objective internal audit review function charged with evaluating, testing and reporting to the adequacy and effectiveness of management’s control of operational risk.” Group Assurance reports regularly to the Board Audit Committee

b. Company Values(3 Marks)

Westpac have adopted a set of values which help determine the culture of the organisation and the attitudes and behaviour of its employees. These values are prominently promoted to employees,

customers and other stakeholders. Westpac supports the Westpac helicopter, their Community Funding Program allocates funds to local branches for support of the local community, Westpac also pays their staff to volunteer for charity and community projects through their Employee Volunteer Program, has received independent recognition for its environmental commitments, including a Money Magazine gold award for ‘Climate Leadership’ and been recognised as one of the ‘Global 100

Most Sustainable Corporations’ by Corporate Knights Magazine. These actions demonstrate

Westpac’s commitment to the Company Values.

c. Corporate Governance and Code of Conduct

(3 Marks)

Westpac has implemented a Corporate Governance Statement which incorporates a Governance Framework with the aim of ensuring transparency and fair dealing, and the protection for stakeholder interests. This is supported by Board and committee Charters, definition of the roles and responsibilities of the Board and Whistleblower policies.

As a listed company Westpac are obligated to meet the ASX reporting and Corporate Governance requirements. Westpac also reports to and lodges documents with the Australian Stock Exchange, ASIC and APRA.

d. Employment conditions(3 Marks)

Westpac have adopted a number of policies dealing with the working environment of their employees including:

Harassment and discrimination

Freedom of association

Redundancy, redeployment and retrenchment

Employee Health and Safety (EHS)

oEmployee Assistance Program

oCritical Incident Management Program

Concern reporting and whistle blowing

Flexible working conditions

Diversity

oGender equity

oFlexibility

oAge balance

oCultural diversity

oPeople with disability

oIndigenous Australians

Graduate Programs

Corporate Values

e. Formal and informal staff training(3 Marks)

There are numerous types of employment available within the different sectors of Westpac. The company has a strong belief in continuing training for staff and they have developed The Westpac Academy, a virtual learning environment which helps deliver a wide range of training modules and resources. Westpac also supports the pursuit of external qualifications through further study and have a Study Assistance Benefit to help pay for tuition and books if you study towards qualifications that are relevant to your Westpac role.

Part 3

Non-conformance to industry standards (10 Marks)

a. Identify and discuss any instances in the links above where the behaviour of the organisation, or its staff, does not/did not conform to industry standards. (3 marks)

b. What steps has the organisation taken to rectify the situation?(3 marks)

c. What would you do if you had been in charge and why?(4 marks)

Part 4(10 marks)

Timeframes should have been agreed (2 marks)

Resources should have been agreed (2 marks) Constructive suggestions for improvement (2 marks) Thanks given for colleagues effort (2 marks) Qualitative assessment of resources provided (2 marks)