Big banks welcome calls for more competition

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The Australian Bankers’ Association, which represents a range of large and small banks, says it is supportive of measures to enhance competition within the banking sector and highlight choices available to consumers.

“We are supportive of ideas that remove barriers to smaller banks and mutuals being competitive,” said ABA chief executive Steven Münchenberg. “For example, when governments announce major regulatory changes, especially at short notice, it hurts smaller lenders disproportionately. Government’s need to recognise that constant regulatory change can hurt competition.”

He said there was a lot of competition in the marketplace, and that customers weren’t afraid to shop around. “We think consumers are smarter than Abacus has suggested in terms of knowing whether a brand is part of a larger bank or not…consumers are more interested in looking for the best deals – those that particularly want to be with a non-major are capable of working out where to go.”

The comments come after Abacus, the industry body representing the Australian mutual sector, has accused the Australian banking sector of being imbalanced, and called for an independent review of the system.

Yesterday, Abacus launched its Balance Banking campaign, backed by consumer research which showed banking competition was a major issue for Australian voters. The polling by D&M research of 1000 Australian voters revealed two out of three wanted an independent inquiry into the country’s banking system.

“Australians are angry about the dominance of the major banks,” Abacus CEO Louise Petschler said.

“The Balance Banking campaign will lobby for change to address the imbalance in banking, through a national debate and independent review of our banking system.”

D&M’s research also showed:

• Almost 80% believe the big banks make excessive profits.

• 65% say there is not enough competition in the Australian banking system.

• 71% agree the big four banks have an unfair advantage in the mortgage market.

“Our credit unions, building societies and mutual banks have 4.5 million customers, that’s one in five Australians,” Abacus CEO Louise Petschler added.

“For us Balance Banking means more competition in Australia’s banking market, a level playing field for smaller players to take on the big four banks and ultimately more choice and better value for consumers.”

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