More than 30 CEOs and Directors from customer owned banking institutions will arrive in Canberra today to remind Members of Parliament to keep competition in mind as the Financial Services Royal Commission recommendations are implemented.
The leaders of Australia’s customer owned banking institutions and the Customer Owned Banking Association will urge MPs to adopt the principles of proportionate regulation and invest in more ways to boost competition in the retail banking market.
Customer Owned Banking Association CEO Michael Lawrence said that customer owned banking institutions are key to improving competition in the retail banking market but need to be given the opportunity to compete fairly.
“The message is clear, greater competition leads to greater customer outcomes. Government must keep competition front of mind if consumers are to receive a better outcome from their banking.
“Without robust competition consumers are the ones who lose out. If there isn’t fear that your customers will up and leave you, there is very little incentive for banks to do what is best for customers.
“The customer owned banking model is the customer focused alternative to the investor owned model. Our CEOs are here to remind MPs that for more than 150 years, our sector has been trusted by Australians to look after their banking and financial well-being.”
Mr Lawrence said customer owned banking institutions aren’t asking to be regulated differently; but in proportion to the size, scale and complexity of their organisation.
“Using the one size fits all approach for all authorised deposit taking institutions with no consideration of the size or complexity of the organisation has serious consequences.
“The cost of compliance for a smaller institution may outweigh the benefits of the regulation, leading to stifled innovation and reduced investment in the community.”
While a more pro-competitive mindset is important, Mr Lawrence said customer owned banking institutions encourage government to do more to make it easier for consumers to switch banks. “There is a role for Government to play to help make it easier for consumers to switch. Creating a task force of Treasury, ACCC, ASIC, industry and consumer groups to investigate the barriers to switching is a good start.”
