The Hammond Review into reforms for co-operative, mutual and member-owned firms handed down its 11 recommendations this week.
Mr Lock endorsed the recommendations and welcomed the federal treasurer’s commitment to implement all of them.
“Customer-owned institutions have been hamstrung in the past because of barriers that made it difficult for us to raise additional capital to support growth,” Mr Lock said.
“That has limited our ability to grow while still remaining true to our customer-focused philosophy.
“Access to capital is increasingly important as all financial institutions face the need to invest heavily in digital technologies.”
The Hammond Review has recommended the required changes to legislation and the Corporations Act to provide customer-owned institutions with greater scope to raise capital.
Mr Lock said that this could be a “game changer” for the banking sector and help pave the way for Heritage and other customer-owned institutions to start realising “our largely untapped potential to be a stronger competitive force”.
Collectively, Australia’s mutual lenders have four million customers and $108 billion in total assets, according to the Customer Owned Banking Association (COBA).
The association welcomed the government’s support of the Hammond Review, particularly around the sector’s capacity to raise capital.
“Greater capacity for customer-owned banking institutions to raise capital will increase their potential to grow, take opportunities and invest in technology,” COBA acting CEO Dominic Dunn said.
“COBA is excited about working with the government to implement the Hammond Review reforms.”
In recent months, COBA has been working with APRA on changes to the prudential regulatory framework to allow customer-owned banking institutions to directly issue Common Equity Tier 1 capital instruments.