Derisking CoFI Legislation

Akshay Rao

Akshay Rao Principal Consultant

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Derisking CoFI Legislation

Date: 22 December 2022

A new regulation that explicitly targets the customer experience can create uncertainty and put the value at risk for businesses, but it also creates opportunity and unlocks new growth levers.

One such regulatory change impacting financial institutions is CoFI Legislation – Conduct of Financial Institutions. Commonly known as CoFI, The Financial Markets (Conduct of Institutions) Amendment Act 2022 is the government’s response to the findings, designed to protect consumers by putting them at the forefront of institutions’ decisions and actions. You can read more about CoFI by clicking on the link at the bottom of this article.

Institutions can look at it as just a compliance exercise or look at the opportunity to anticipate, identify, understand, and respond to the key regulatory issues that affect the industry and primary users. Placing the customer at the centre of the problem to develop empathy-led solutions that benefit all stakeholder’s agendas and priorities.

Navigating the ambiguity of regulation change

To front-foot CoFI and comply by 2025, financial services organisations must determine how to quantify good customer outcomes for their business.

Developing a comprehensive FCP will require measures across the complete customer journey, demonstrating fair conduct. Yet, quantifying customer outcomes is inherently tricky and ambiguous, mainly where a diverse mix of products and services are offered to customers, with individual circumstances changing over time. Organisations must also resolve the issue of appropriately incentivising sales teams and their intermediaries without disadvantaging customers.

In 2019, I was involved in a project with the ANZ Bank team, who were front-footing this space with a project to deliver good customer outcomes. Based on my learning from the exercise, I recommend the following four aspects to consider while navigating this regulatory change:


By going directly to the people who really matter, customers, and working across teams, including frontline staff and intermediaries, we can build an accurate definition of good customer outcomes and fair conduct specific to the organisation.


It is vital to ensure customers and end-users have a delightful experience throughout their interaction with the organisation. It’s about having a holistic view of the customer’s journey.


We need to identify the right set of informative measures to capture, record, and indicate how the organisation delivers fairly for the customers.


This is not an activity that is performed once and completed. It’s the start of a journey, and you need to have mechanisms and dashboards created to ensure continuous monitoring of the identified measurements to ensure the customers are constantly being treated fairly.

If you want to discuss how we’ve taken a customer-centric approach to tackle such regulatory changes, don’t hesitate to contact me. I would be happy to share my experience working in this space.

Check out for more related CoFI content. 

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