The financial services industry has been warned to expect a tougher approach from corporate and prudential regulators next year.

The Australian Securities and Investments Commission (ASIC) will put staff on-site with major financial institutions to monitor governance and compliance, Commissioner John Price told a recent Financial Services Institute of Australasia event.

He says this will encourage companies to place the customer first and deal quickly with poor conduct.

The Federal Government recently legislated additional funding for ASIC to improve enforcement.

The regulator will target corporate governance practices and examine the role of boards and officers in oversight and risk management. Remuneration practices and their capacity for corrupting behaviour will also be under the spotlight, as will corporate disclosure.

ASIC will be a strategic and forceful regulator, Mr Price says.

Australian Prudential Regulation Authority (APRA) Deputy Chairman John Lonsdale says the organisation is re-examining misconduct cases raised at the Hayne royal commission where evidence is new or contradicts what APRA was previously told.

He says APRA must consider a stronger appetite for formal enforcement action, possibly giving greater weight to its strategic use as an industry deterrent.

The regulator will remain supervision-led, tackling problems before they compromise a company’s ability to meet its obligations, Mr Lonsdale says.

APRA is undertaking a strategic review of enforcement strategy, with a report due in March.

Mr Lonsdsale says the royal commission’s report and the Government’s response will be priority issues.