The head of Australia’s second biggest credit union believes the industry has reached a pivotal point that will determine its future.
Mutuals are being sidelined in a market that continues to be dominated by the majors, who currently hold a competitive advantage over smaller lenders with capital requirements.
People’s Choice Credit Union chief executive Peter Evers admits the mutuals must become far more competitive in their value propositions but stressed an “equitable playing field” is necessary to do so.
“Competition is fantastic – it makes you think differently, it makes you more innovative and it allows you to understand the consumer,” Mr Evers said.
“That is all great for the end consumer looking for a loan or a deposit, but you need to have an equitable playing field to be fair,” he said. “And that is the key.
“It is not fair at the moment – it’s imbalanced. The majors have such a substantial advantage that, tied to their market power, they are just compressing what would otherwise be genuine competition.”
While the Murray Inquiry has acknowledged the funding disparity, the industry will have to wait until November when the FSI makes its final recommendations.