The Australian Prudential Regulation Authority (APRA) has acknowledged that the number of institutions it is required to oversee has declined rapidly in recent years, as a result of industry consolidation.
APRA chairman John Laker told a recent conference in Adelaide that the financial services industry had been experiencing an inexorable process of consolidation, which had included banks, building societies, credit unions and superannuation funds.
“Even in the last five years, the number of banks, building societies and credit unions — known as authorised deposit taking institutions — has fallen from 281 to 223; general insurers from 162 to 133; life insurers and friendly societies from 84 to 62; and superannuation funds, where licensing has spurred the process, from 4,233 to 1,147,” he said.
Laker said the combination of industry consolidation, innovation and strong balance sheet growth meant APRA was now supervising a smaller number of institutions of increasing size and complexity, many seeking to grow their business offshore and/or tap into offshore service providers.
