The royal commission into misconduct in the banking, superannuation and financial services industry currently under way in Australia carries with it a mixed bag of effects, according to Moody's Investors Service.Although it notes that tighter mortgage underwriting standards could eat into the profitability of Australia's banks, the ratings agency sees positives in increased accountability for senior executives and improved governance and culture for the banks . "Some of the operational and conduct failures in the country's financial services industry were known issues that have already prompted regulatory, legislative and industry responses" and the impending legislative changes "will enhance bank governance and executive accountability", Moody's says.It notes that APRA's reviews of the four major banks' mortgage serviceability standards found "a number of deficiencies, which banks are rectifying". "We view the possibility of a slowdown in credit growth resulting from tighter mortgage underwriting as a key risk to banks' profitability," it says.But the negative effects of this might be countered by the concentrated sector structure, which will prop up any inefficiencies, Moody's suggests. These natural barriers to entry will underpin bank profitability and underpin the banks' credit profiles.The royal commission has thrown the spotlight on deficiencies and misconduct in the financial advice sector, but Moody's notes that banks had already begun moving away from what is "a complex business with significant compliance and regulatory requirements". "Wealth management is increasingly a legacy business for banks". "In our view, the benefit of reducing exposure to these challenges offsets the loss of the relatively small profit contributions from financial advice," say the Moody's analysts.Even the risk of penalties is downplayed by Moody's: "Any penalties are likely to be heavier than in the past but still manageable." "In the event that any banks or wealth managers ultimately receive financial penalties in relation to the findings of the commission, there is a risk they may be more significant than those handed down in the past. Still, for banks, fines will be manageable, given their strong profitability."