Regaining the trust of Australians is a responsibility for the financial services industry, not the prudential regulator.
Speaking at the Annual Risk Management Association CRO conference in Sydney this week, APRA chairman Wayne Byers said the Royal Commission brought many well-known industry issues before the eyes of the public for the first time.
Byers said a miscalculation of the risk and return trade-off in the way business has been conducted in financial services is at the heart of the issues discussed at the Royal Commission, adding reputation and trust had been squandered due to undervaluation in those calculations.
Byers added regaining the trust of the public was the responsibility of the financial services industry.
"It is not the regulators' job to regain that trust for you," Byers said.
"The industry needs to earn and sustain the community's trust through its own actions."
Byers noted APRA could reinforce the industry's efforts to restore its public standing.
"There are, however, a range of regulatory and supervisory activities that APRA is pursuing that will support and reinforce your own efforts to restore the industry's standing," he said.
Byers also questioned whether the "quantification" of the risk management profession had created a blind spot for risks that were difficult to quantify.
"The finance industry, and the risk profession that serves it, has a natural affinity for measuring things in dollars and cents, percentages and basis points," he said.
"But that means the conventional risk management frameworks and processes find it difficult to grapple with difficult-to-quantify risks, such as those relating to behaviour and reputation."