Yesterday, over 30 CEOs and directors from customer owned banking institutions convened in Canberra to urge Members of Parliament to protect competition while implementing the royal commission recommendations.
The banking leaders, along with the Customer Owned Banking Association, urged MPs to adopt the principles of proportionate regulation and invest in more ways to boost competition in the retail banking market.
“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,” said COBA CEO Michael Lawrence.
“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.”
As such, the customer owned banking institutions asked to be regulated in proportion to the size, scale and complexity of their organisations.
“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,” said Lawrence.
“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.”
The group in Canberra also asked the government to do more to help consumers looking 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,” said Lawrence.