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An independent report by KPMG has highlighted the operational resilience, innovation and confidence of customer owned banking in navigating the economic uncertainty of COVID-19.

The KPMG Mutuals Industry Review 2020 reports that 70% of surveyed customer owned banking institutions feel confident in their three-year growth prospects, representing a notable increase from 63% in 2019.

“This has been a tough year for all, but our members continue to prioritise the needs of their customers as the economy looks to the recovery phase,” says Michael Lawrence, CEO of COBA.

“Our sector has grown over the year with residential lending increasing by 3.0% and deposits increasing by 7.0%. This market share underlines the fact that customer owned banking institutions continue to be seen as an attractive proposition for customers.

“As noted by the report, our members have maintained a reputation for trust through a period of increased public scrutiny. They have a deep alignment with their customers, and this trust is a cornerstone of their resilience as they move forward together.

“This is also reflected in their community involvement, which most members view as a key differentiator to their business.

“While our sector continues to compete on price, we are also at the forefront of technology and innovation, including alliances with fintech companies. For example, Newcastle Permanent struck a $300 million home loan funding deal with Athena Home Loans, enabling the customer owned banking institution to utilise Athena’s digital home loan platform to attract new borrowers.

“Headquartered in Armidale, Regional Australia Bank is a market leader of Open Banking. As one of only two accredited data recipients, the institution collaborated with fintech ‘Basiq’ to approve a loan application end-to-end in under six minutes. These examples showcase the strength of the customer owned model in using technology to innovate and improve the customer experience.

“With our members now supporting over 4.5 million customers, it’s important for government and regulators to apply proportionality to upcoming regulations. New rules should be well-targeted, fit for purpose, and not an impediment to growth. A competitive banking market is vital to economic recovery.”

The KPMG Report is based on a survey of 47 customer owned banking institutions.