Customer-owned banks have welcomed new Statements of Expectations for APRA and ASIC, saying the update reflects long-standing calls for regulation that better matches the size and risk profile of individual lenders.
The Customer Owned Banking Association (COBA) said the changes place renewed emphasis on proportionate, risk-based regulation while preserving consumer protections and financial stability.
COBA chief executive Michael Lawrence (pictured) said the sector had pushed for this shift for some time.
"We have consistently advocated for regulation that is proportionate and risk-based, so customer-owned banks can continue to deliver genuine customer choice and robust competition in banking," Lawrence said.
He added that recognising the diversity of banking models in Australia was central to the update.
"We welcome these updated expectations, which recognise the importance of a diverse banking sector in Australia," Lawrence said.
Lawrence said a regulatory approach that accounts for differences between banks would let customer-owned institutions concentrate on member and community service without being weighed down by rules designed for larger players.
"We welcome a tailored regulatory approach that recognises the distinct models and risk profiles of different banks," he said, adding it would support "greater competition and choice across the Australian banking sector."
COBA also welcomed a new commitment from regulators to publish key performance indicators tracking how regulatory burden is being minimised for industry, saying this would improve transparency around future rule making.
COBA represents 47 mutual banks and credit unions, collectively serving more than 5.4 million Australians. The association argues that because these institutions are owned by their customers rather than shareholders, they are structured to prioritise community and member outcomes over profit.
"Fit-for-purpose and proportionate regulatory settings will support customer-owned banks in their market-leading service to members and broader communities – and ultimately give Australians more choice," Lawrence said.
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