Customer-owned banks want better sequencing of reforms to ease regulatory pressures
The Customer Owned Banking Association (COBA) has welcomed the Australian government’s Regulatory Initiatives Grid pilot but stressed the need for stronger coordination among regulators to reduce the regulatory burden on small and medium-sized banks.
COBA chief executive Michael Lawrence (pictured above) described the grid as a “positive step” towards greater transparency in the regulatory environment but said it must go further to deliver meaningful benefits for customer-owned banks.
“To truly benefit customer-owned banks and promote a diverse banking landscape, the grid must improve regulator coordination and the sequencing of reforms,” he said.
The call comes as the Council of Financial Regulators’ Review into Smaller and Medium-Sized Banks issues paper noted a significant increase in banking regulation over the past decade. This surge has brought higher costs associated with capital requirements, compliance, and reporting.
“All financial institutions have been impacted by the cumulative weight of regulatory change,” Lawrence said. “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.”
COBA argued that better coordination among regulators would help ensure major reforms are spaced out more effectively, giving smaller banks sufficient time to plan, prepare, and allocate resources.
While recognising the grid is still in its pilot phase, COBA urged regulators to engage with the banking industry during its development and improvement.
“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,” Lawrence said. “This will not only benefit customer-owned banks but also strengthen the Australian financial landscape, leading to better outcomes for consumers and the economy.”
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