If allowing outright mergers is not a credible option, can banks combine to secure lower costs and improve services some other way?A utility model is one mechanism -  one with established building blocks in Australia but that has not been tried in a systematic way.Consultants AT Kearney wrote in their submission to the Financial System Inquiry that "there are ways the industry can explore sector-wide or multi-bank initiatives to reduce cost and increase productivity.''AT Kearney postulated that "success could mean higher economic surplus available to meet competing objectives … and crucial for the virtuous growth cycle in the industry and of the economy."General insurance offers one model worth considering. The successors to Mercantile Mutual set up a joint venture with QBE in 1999 to rationalise branch offices and systems and are operating still-competitive brands serviced by a common back office.Under this approach, some fiercely independent brands in banking need to get into the business of shared production.There are working examples to justify revisiting ideas last pursued in the early 2000s. Banks at the time took the view that they could not persuade the ACCC of the merit of a utility model.Tony Richards, head of payments policy at the Reserve Bank of Australia said this week, of the new payments platform, "the board expects that the NPP will create a good platform for future innovation.""It has been particularly encouraged by the way that the industry has come together to work on the NPP. It is conscious of the substantial commitment of time and resources that the industry is making in this project in response to the strategic objectives identified by the Bank. "This investment will deliver significant benefits for the Australian economy. It should also help ensure that the institutions that are currently providing payments services to Australians remain relevant in the future too."The centralised infrastructure and real-time nature of the system, combined with the flexibility of payment messaging, ability to carry additional remittance information and the easy addressing capability, will mean that payments can be better integrated with many other aspects of our lives. "Businesses should be able to achieve substantial efficiency gains and there will be significant improvements to the timeliness, accessibility and usability of the payments system for consumers."Banks have pooled operations in carting cash around Australia and cheque processing over the last 15 years.Genuine cost savings of this type can be found elsewhere in banking, most notably in mortgage servicing. This means lower costs to consumers and deserves to be an industry goal.