The Customer Owned Banking Association (COBA) welcomes the Regulatory Initiatives Grid pilot but emphasises the need for regulator coordination to ensure it delivers on its promise of easing the regulatory burden for small and medium-sized banks.
“The Government’s Regulatory Initiatives Grid is a positive step towards greater transparency, but it needs to be more than just a window into upcoming changes. To truly benefit customer-owned banks and promote a diverse banking landscape, the Grid must improve regulator coordination and sequencing of reforms,” COBA CEO Michael Lawrence said.
As acknowledged in the recently released Council of Financial Regulators’ Review into Smaller and Medium-sized Banks issues paper, there has been an increase in banking regulation over the past decade which has brought with it a surge in costs related to capital, reporting, and compliance.
“All financial institutions have been impacted by the cumulative weight of regulatory change. However, this impact has been magnified for customer-owned banks as they are smaller in size and face disproportionate challenges in navigating a fragmented and uncoordinated regulatory landscape,” Lawrence said.
Regulator coordination would mean that major reforms would be better spaced out by the agencies, preventing them from occurring at the same time. This would help customer-owned banks better plan, prepare, and allocate resources for future implementations.
“Ultimately, a coordinated approach to regulation would empower customer-owned banks to compete more effectively, leading to a more dynamic and diverse banking landscape,” he added.
COBA recognises that the Regulatory Initiatives Grid has been initially developed as a pilot and will be improved over time, and believes industry should be consulted and involved in the development of Grid updates.
“A collaborative approach to the Regulatory Initiatives Grid will ensure it evolves into a robust tool that truly supports a diverse and competitive banking sector. This will not only benefit customer-owned banks but also strengthen the Australian financial landscape, leading to better outcomes for consumers and the economy,” Lawrence said.
COBA’s Chief Executive Officer, Michael Lawrence, is available for interview. For further information or to arrange interviews, please contact media@coba.asn.au
The Customer Owned Banking Association is the industry body for mutual banks, credit unions and building societies. For almost 180 years our sector has put customers first, returning profits to more than 5 million Australians who put their trust in customer-owned banks.