Login
ISCOVER
The Customer Owned Banking Association (COBA) has welcomed a new report by Moody’s rating agency, saying it highlights the strengths of the customer-owned banking model.
Moody’s has commended the strong balance sheets, conservative business models and above-average degree of customer loyalty of the customer-owned banking model.
To continue reading the rest of this article, please log in.
Looking for more benefits? Become a Premium Member.
Create free account to get unlimited news articles and more!
Looking for more benefits? Become a Premium Member.
According to the report, Competition remains a key challenge for Australian mutuals, “Mutuals tend to deemphasise profit maximisation in favour of providing value to members”.
“Mutual franchises emphasise specific customer sets, community involvement and customer service, which support their strong customer satisfaction metrics,” the report said.
COBA chief executive officer Louise Petschler said the strengths highlighted by the report show the importance of the customer-owned banking model to the overall financial system.
“This report is timely as the Financial System Inquiry (FSI) gets into stride in its examination of the Australian financial system,” she said.
“The strengths of the customer-owned model are strengths for the financial system, contributing to stability and genuine consumer choice.”
According to Ms Petschler, a key issue of the FSI is how the regulatory framework promotes competition.
“COBA has identified at least nine examples of the regulatory framework’s failure to deliver competitive neutrality for the customer-owned model.
“The major banks have unfair advantages delivered by the regulatory framework that they can use to compete aggressively against smaller players,” she said.
