The Financial System Inquiry should use its upcoming final report to make consumers trust banks again – as before the GFC – Australia’s smaller lenders have urged.
In a speech on Monday, FSI chairman David Murray said the financial services industry was “going through a post-crisis period where trust has had to be rebuilt”.
Mark Degotardi, acting chief executive of the Customer Owned Banking Association (COBA), has agreed that consumers’ trust in banking has been shaken, but that it can be rebuilt by promoting genuine competition.
“Our record speaks for itself – market-leading customer satisfaction, where the customer is the sole focus, and where ethical and responsible banking institutions invest in their customers and their communities,” he said.
Research commissioned by COBA found that 62 per cent of Australians have little or no faith in the big four banks to give independent financial advice.
Mr Degotardi said the FSI’s final report will be an opportunity to recognise the strengths of mutual banks, deliver competitive neutrality and empower consumers with choice.
“It’s time to start looking to banking institutions outside the big four to deliver on the community’s expectations of trustworthy, responsible banking,” he said.
“With more than four million customers, Australia’s mutual banks, credit unions and building societies are well placed to take up the challenge if given a fair go in the regulatory framework.”