A recent report has questioned the regulatory outcome of the royal commission recommendations given that Australia’s financial services sector is “so much more than the big four.”
According to a report published by Grant Thornton Australia, “The new banking landscape will be fast paced, adaptable and agile – our regulation needs to match.”
Fintechs and neobanks are named as examples of the types of institutions that should be heavily invested in – those harnessing research, innovation, and technology to provide the highest level of service to customers.
To support growth of non-majors that are performing well by both profit and customer satisfaction measures, regulators should not only aim for a level playing field, but identify and implement ways to facilitate growth and diversity in the sector.
Instead, policymakers have instituted a "disproportionate ‘one size fits all’ regulatory environment to address the problems identified in one particular sub-section” that aren’t evidenced in smaller banks that emphasise customer service.
“[Post royal commision] cost of regulation is easily absorbed by larger ADIs – the big banks – but can put undue pressure on the smaller ADIs – such as customer-owned institutions – that strive to compete in an environment where the cost of compliance is already burdensome, and the changing nature of technology continues to strain resources,” the report explained.
