Majors will influence FSI, consumers say

As the Financial System Inquiry (FSI) prepares its interim report, 67 per cent of Australians believe the major banks will have too much influence.

An EMC report, Attitudes to Banking Competition in Australia, has found 60 per cent of consumers agree the FSI will fail if it does not make recommendations that put limits on the power of the big four banks in the marketplace.

The report found that in the Australian home loan market, consumers believe there is a lack of real competition and fairness.

Sixty-nine per cent of consumers think 70 per cent or more of all home loans are controlled by the big four banks, while 47 per cent think the dominance of the home loan market by the big four banks is bad for the economy, and 61 per cent think it is bad for consumers.

The report was commissioned by the Customer Owned Banking Association and surveyed over 100,000 consumers between 24 and 29 January 2014.

It looked at customer attitudes to bank ownership and found Australians have a low level of knowledge of the different bank brands owned by the majors.

Approximately one in five Australians assumed Aussie Home Loans (21 per cent) and RAMS (19 per cent) were owned by independent shareholders.

Bank ownership has featured heavily in the community banks’ submissions to the FSI.

CUA chief executive Chris Whitehead told Mortgage Business that a regulatory gap has allowed bank ownership to go undisclosed.

“Something we have highlighted is the multi-brand strategies the majors - particularly Westpac - are doing, which creates a lot of confusion,” Mr Whitehead said.

“Westpac even acknowledged there are customers out there who prefer not to deal with the big four and that’s one of the reasons they have these alternative brands, which is a bit ironic,” he said.

“If you walk past a Bankwest or Bank of Melbourne branch you will see them comparing themselves to the big four and that feels misleading.”

The FSI will publish an interim report next month.

promoted stories

Latest News

Recommended for You