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In an environment where interest rates are increasing and economic uncertainty looms, organisations will question their borrowing for capital expenditure, impacting bank lending. There will be further regulatory reforms, an increased focus on managing cyber risk and changes to capital frameworks.
It’s a time of accelerated change, with evolving expectations from all stakeholders, including consumers, businesses, investors, shareholders and regulators. New and sustainable ways of doing business alongside rapidly advancing digital innovation and more agile competitors are transforming the financial services market.
It’s time to explore new opportunities, as well as reimagine capabilities, operating and business models. By working with us, we’ll ensure you’re set up to get ahead of the change.
With APRA and ASIC rolling out significant and concurrent regulatory reform, governance, compliance, performance and conduct are all under the spotlight.
Innovation is at the centre of Financial Services – across AI, open banking, Fintechs and more – driven by regulatory changes, shifting consumer preferences and technology transformation.
Businesses need to stay on top of change across their prudential requirements, including measures put in place by ASIC and APRA, transitioning from BEAR to FAR, and adopting ESG reporting.
Proactive stress testing to manage macroeconomic risk, strengthen financial stability and banking
In July 2025, we wrote about the Federal Court’s decision in S.N.A Group Pty Ltd v Commissioner of Taxation [2025] FCA 240, which was widely seen as a ‘commercial reality’ endorsement for inter entity service fee arrangements in closely held groups – where documentation is known to be imperfect.
The AUSTRAC AML/CTF Starter Programs provide a structured pathway to achieving AML/CTF compliance that will significantly reduce the effort and cost of AML/CTF compliance for entities required to meet AML/CTF obligations under Tranche 2.
The Australian Prudential Regulation Authority (APRA) has been rolling out significant and concurrent regulatory reform across the financial services sector. Regulated entities will need to continue navigating these reforms, including the implementation of the Financial Accountability Regime (FAR), the growing spectre of cyber risk and information security, and enhanced prudential requirements around operational resilience and risk management. FAR is expected to optimise risk management and governance across banking, insurance and superannuation. Alongside this, new enforceable requirements have been put in place by the Australian Securities & Investments Commission (ASIC) around financial reporting and transparency. Preparing early to ensure compliance is key to satisfying the changing regulatory requirements going forward.
Driven by regulatory changes, shifting consumer preferences and the fast pace of technology transformation, innovation is at the centre of financial services. This has allowed organisations to become more competitive, better manage their data and make more informed decisions. Ranging from artificial intelligence synthesising information to drive personalisation and streamline operations, to open banking, enabling financial institutions to better manage risk and create tailored products – there’s a raft of innovation at your fingertips.
However, recent data breaches bring into focus the importance of cyber security and operational resilience, as well as having a strong strategy in place to prevent, minimise and rectify impacts. You’ll need to stay on top of requirements including APRA’s Prudential Standards CPS 234: Information Security and Prudential Standard CPS 230: Operational Risk Management.
Fintechs range from digital-only banks to any technology used to streamline, digitise or disrupt traditional financial services. As the fastest growing financial sector, fintechs are disruptors with huge market potential. They’ve been embraced by businesses and consumers alike, with increased demand for 24/7 access to finances. Fintechs now have the opportunity to drive change, expand into other industries – and sometimes even scale up and expand into new markets. Those that thrive will have robust growth plans and innovative strategies. They also need to stay on top of challenges such as attracting and retaining talent, accessing much-needed capital to support growth, and keeping up-to-date with regulatory change in an environment that is constantly changing.
Regulatory reform is the largest challenge for the banking sector. Despite revenue growth, domestic banks including credit unions and mutuals have to navigate challenges such as the slowing growth in capital expenditure by the private sector, multiple reforms and changes to the capital framework. One of the major regulatory changes off the back of the Royal Commission is the adoption of FAR to replace the Banking Executive Accountability Regime (BEAR). As this presents some changes to reporting, transitioning from BEAR to FAR will require significant planning, a strong understanding of new responsibilities and accountability obligations.
Private health insurance (PHI) has already faced multiple challenges with COVID-19 restricting growth, rising premiums and a perception of poor value limiting the expansion of health insurance funds, especially amongst younger people. In addition, the next few years are expected to bring significant reform to the wider health sector and will have major implications on PHI, requiring funds to be prudentially sound, with strong risk management practices at their core. To remain competitive, PHIs need to focus on optimising member experiences, leverage emerging technologies and provide flexible service offerings.
The reform agenda, designed to improve transparency and performance and enhance accountability remains front of mind for superannuation funds, employers and members. Additionally, superfunds are adopting net zero commitments by 2050 as part of the rising ESG focus of superfunds and increasing ESG investment options.
Increasing regulation, margin compression and investor demands for returns and transparency in a challenging global environment have brought new challenges to the asset management sector. Changes to superannuation in particular will flow downstream to asset managers as transparency and performance is tested on an annual basis. ESG integration has continued to evolve quickly in Australia as asset managers integrate ESG into their investment decision processes.
Australia's transition to real-time, instant payments is reshaping the financial landscape by phasing out traditional methods like cheques and direct debits. Businesses must update their systems to support instant transfers using mobile numbers or emails, affecting operational efficiency, security, and compliance. Although implementing new payment infrastructure requires an initial investment, moving away from legacy systems will enhance cash flow, reduce operational costs, and help maintain a competitive edge.
The Grant Thornton SuperWomen Initiative was born out of a commitment to listen to the challenges that women in the industry are facing and find solutions to assist some of the barriers for women in the industry.
Underpinning a sound capital and properly regulated financial services sector is the requirement for external and internal audits. Given the complexity of the financial services sector properly trained, resourced and experienced auditors are required.
Our finance and funding team works to access sources of finance, present your case to potential funders and negotiate a long-term sustainable relationship.
Our consulting team supports its clients with hands-on and proactive advice on all aspects of their strategies for sustainable growth.
We work with clients at all stages of their business lifecycle – and through all their organisation’s major events – to navigate tax obligations.
Underpinning a sound capital and properly regulated financial services sector is the requirement for external and internal audits. Given the complexity of the financial services sector properly trained, resourced and experienced auditors are required.
Our consulting team supports its clients with hands-on and proactive advice on all aspects of their strategies for sustainable growth.
Our finance and funding team works to access sources of finance, present your case to potential funders and negotiate a long-term sustainable relationship.
We work with clients at all stages of their business lifecycle – and through all their organisation’s major events – to navigate tax obligations.
Partner & National Head of Financial Services
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In the meantime, if you have any questions, please don't hesitate to contact us via communications@au.gt.com.
Founded in 1966, Teachers Mutual Bank Limited is one of the largest mutual banks in Australia, with over 198,000 members and assets of over $7 billion. Listen to Steve James, CEO of Teachers Mutual Bank, talk about contributing factors to their significant growth and approach to responding to changes in the market.
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