The financial services industry needs to embrace the concept of “first, do no harm”, Australian Securities and Investments Commission (ASIC) Chairman James Shipton says.

Everyone should accept the fairness challenge and have the procedural discipline to ask if a practice or product is going to cause harm, be detrimental or have negative consequences, he told the ASIC annual forum in Sydney.

“I am not convinced this level of questioning and procedural discipline has been applied by the financial industry when developing and reviewing business practices and financial products,” Mr Shipton said in his closing comments.

He emphasised that putting people and fairness first is essential, and more needs to be done to achieve the “twin and complementary goals”.

“It is also clear that this needs to be viewed as an investment, and not a cost, in improving business models and bettering business practices.”

Mr Shipton says the industry must become more inclusive and should ensure it operates as a core part of the community and not at a removed distance.

“The sobering reality is that, just as we need to make the financial system a fairer one, we also need to work harder to include every segment of our community into that system,” he said.

“Ultimately, we need a financial system that not only services every segment of the community but also is one where those who work in it feel proud of being a part of it.”

Earlier in the forum he warned of a tougher regulatory approach by ASIC, with financial services providers in breach of the law more likely to face court action.

ASIC came under fire during the Hayne royal commission for favouring negotiated agreements over public denunciation and punishment.

More than 950 delegates attended the ASIC forum, which also coincided with the 44th Annual Meeting of the International Organisation of Securities Commissions (IOSCO).