It provides a clearer picture of the future regulatory landscape
The Australian Banking Association (ABA) and the Customer Owned Banking Association (COBA) have expressed support for the government’s new initiative to launch a Financial Sector Regulatory Initiatives Grid.
The regulatory grid aims to unify major financial services regulators to coordinate regulatory changes, which is expected to benefit the entire financial sector by enhancing transparency and improving the planning and allocation of resources.
Anna Bligh (pictured left), chief executive of the Australian Banking Association, highlighted the benefits of the move, stating it will provide a clearer insight into the forthcoming regulatory environment, which in turn will facilitate the government in advancing policy initiatives while simultaneously alleviating the compliance load on the industry.
“Banks recognise that regulation is vitally important for maintaining confidence within the financial system and protecting customers,” Bligh said. “With almost 1,200 pages of new laws and regulations placed on the banking sector in the past four years, any initiatives that will allow banks to better plan and coordinate future regulation is welcome.
“The introduction of this grid will also be good for competition within the industry, with mid-tier banks having better visibility of regulatory change, enabling them to better plan and allocate resources more effectively.”
According to COBA, the initiative also addresses the challenges faced by customer-owned banks, which have struggled with the increasing complexity and cost of regulatory compliance, exacerbated by a fragmented regulatory environment.
“We are delighted to see the government press ahead with an Australian Financial Sector Initiatives Regulatory Grid,” said Mike Lawrence (pictured right), chief executive of the Customer Owned Banking Association. “This will allow customer-owned banks to better forecast staffing and resource requirements, plan for regulatory change, and better compete with larger banks. We all know that a competitive banking market benefits all Australians and creates a more dynamic finance industry.
“The relatively small size of some customer-owned banks compared to their shareholder-owned counterparts makes it harder to keep up with the tsunami of regulatory change we are seeing in the financial services sector. This impacts their ability to compete and is key to why we have been advocating for this initiative for a number of years.
“We look forward to working with the government on the design to make sure that the Regulatory Grid delivers productivity, transparency, and accountability benefits. Significant regulatory change will continue as the risk environment becomes more complex and dynamic. The introduction of a Regulatory Grid means better coordination and mapping of regulation, which will help banks and credit unions manage this burden and maintain critical investments in customer-focused initiatives.”
COBA anticipates further engagement with the government and regulators to ensure the customer-owned banking sector’s growth, aiming to foster more competition and innovation in banking solutions for Australian consumers.
“The customer-owned sector is essential to keeping Australian banking competitive, and ensuring customers have options when it comes to first-class service and products,” Lawrence said. “COBA will continue to advocate for more recognition of the customer-owned banking sector overall, and the diversity of banking business models.”
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