The banking industry in Australia "has delivered on the four core economic functions… to a larger extent than in most comparable markets," consultants AT Kearney observe in a recently released paper.The authors of the most interesting submission to the Financial System Inquiry continue to take an optimistic view of banking's future in Australia.The industry, says AT Kearney, has "managed the delicate balancing act of meeting… competing objectives relatively well."They add that "Australia's banks achieved an enviable balance when compared with the struggles and compromises seen in several global markets."The consultants see plenty to manage, however."A deeper look raises some questions that reinforce the need to challenge the status quo and create a refreshed, forward-looking vision for the industry," they write."Demand for [the] core economic functions [of banking] in Australia has increased significantly over the past decade, with banks playing a larger role in meeting this demand."The report poses five questions that AT Kearney  asserts "indicate a need to challenge the status quo and chart a new vision for the industry:-- Are all sectors of the economy benefiting equally from the increase in funding availability and the strength of Australia's banking industry?-- Is the stable average RoE for the industry sustainable?-- Are current measures of customer satisfaction truly representative of how customers perceive and choose their banks?-- Can banks continue to inject equity at rates required by more conservative regulations?-- Can greater economic surplus be created through bolder, industry-wide productivity initiatives?The final question "focuses on the industry acting in a coordinated fashion to identify and capture further productivity improvements," AT Kearney say, continuing a primary theme from their FSI submission."The cost to ratio of Australian banks has dropped over the past decades and is one of the world's lowest."However, this drop does seem to be driven more by an increase in income without a proportional increase in costs."Income has grown 38 percent with a cost increase of 23 percent, they note."While this is indeed a major achievement, are there ways the industry as a whole can explore sector-wide or multi-bank initiatives to reduce costs and increase productivity more dramatically? "Given that banking's role in the economy is larger than the people it directly employs, should banks explore more ambitious productivity initiatives such as industry-wide utilities, as we have seen globally and in the superannuation industry (for example, shared administration platforms across industry funds)?"Success in such sector-wide experiments could mean higher economic surplus available to meet competing objectives without compromising any one of them, and as we have seen, this is crucial for the virtuous cycle of growth in the industry and the economy."