While 2018 was not exactly the easiest year for Australian banks, it seems clear that it was even harder for those looking to invest in them. With the Royal Commission inquiry’s findings spilling out into the press and the markets, there was little that the banks could do to prevent some of the scandals affecting their bottom line.

This had a knock-on effect on banking investors, who felt a little more uncertain about what they should do with their money. As shareholders are now threatening to revolt over executive pay, all is certainly not well within investor ranks.

Such sentiment is likely to spread into 2019, as Commissioner Kenneth Hayne’s final report from the inquiry is due next month. Most major lenders failed to escape some sort of censure, and one of the key points to emerge from the revelations is that change is necessary to improve the kind of culture that caused the banks’ problems.

Some experts believe that the Hayne report will only unearth the tip of the iceberg and that the banks will need to come to terms with some other aspects that have been bubbling away underneath. With topics of discussion ranging from dispute resolutions and remediation to fair competition and the effectiveness of current vertical market strategies, it is far from certain what any of the banks’ next steps will be.

The Morrison administration is aware of these ongoing issues but is reticent to act upon them until it takes note of the final report. Otherwise, Australians could view the administration as acting against the key movement that finally brought the banks to account for financial misconduct and negligence.

With Australian elections not too far away, issues involving politics have been simmering in the background. As incumbent Prime Minister Scott Morrison prepares to face up to the slightly favored Bill Shorten and the Labor Party, the Liberals are trying to retain their current grip on power.

Labor has been championing a totally different form of governance when it comes to banking, promoting changes to tax returns on dividends and the level of negative gearing applied to the housing market. The party has been waging its campaign by acting tougher on the banks than its opposition, and if Labor’s election drive is successful, then the face of Australian banking could alter completely.

All this uncertainty has seen a whopping $45bn of market value wiped off the Big Four banks, and as global markets weaken, it is becoming harder for the banks to safeguard profits.

Uday Cheruvu, Portfolio Manager of the Australian Equities Fund at PM Capital, said that there is reason to worry about the market seeing further effects. Regarding the review of the banks, Cheruvu added: “It’s absolutely weighing on the share prices.”

As more fund managers begin to see negative impacts, it is only a matter of time before such sentiments start to drag on investors and cause them to view the banks as less of a safe bet. While some argue that this may be a necessary process for the banks to rid themselves of the potentially toxic culture that led to the Royal Commission inquiry, investors are now facing relatively uncharted waters.