The Council of Financial Regulators will provide a final report to the Government by 1 July 2025 on its Review into small and medium-sized banks, conducted with the Australian Competition and Consumer Commission.
The Government announced this review in June last year, and on Friday the COFR provided an outline of its work and thinking so far.
“The Council noted that there had been a wide range of feedback and issues raised by stakeholders in the recent consultation process, which closed in early February.
“These covered proposals for adjustments to the regulatory and legislative frameworks to enhance proportionality and transparency, including in relation to reporting requirements.
“The Council discussed the importance of developing a factual basis on the issues raised and impactful final recommendations” the COFR concluded, a sentence that reads like mutual banks – which are the real focus of this review – might be getting somewhere.
However, APRA on Friday cautioned mutual banks they had better get their act together, and hike their investment spend, on a number of fronts.
“Banks of all sizes will need to be agile enough to develop the products and services that the next generation of mutual customers is demanding and strong enough to remain resilient in a crisis” APRA member Therese McCarthy Hockey told the COBA CEO and Directors Forum.
“Thriving in this highly dynamic environment will require the right long-term business strategy as well as detailed and deliverable plans to identify and recover from threats to their viability. The message I want to leave you with today is that while many of you have these in place and are set up for future success, others have work to do.
“Whatever your preferred strategy for long-term sustainability, it cannot be complacency.
“While competition from new financial system players, such as non-bank lenders, fintech giants and cryptocurrencies, is impacting all banks, the way mutuals approach these challenges needs to be different by virtue of the tools available to you.
“Failing to identify this strategic risk and adapt the business accordingly could leave mutual banks unable to attract the next generation of customers you need to keep your institutions sustainable.
“The customer-owned banking model may have prospered in Australia for more than a century and a half, but not every mutual has lasted the distance.
“So no matter how confident you are that your bank and its customers are protected today, make sure you also reflect deeply on whether you are prepared for tomorrow.”