AUSTRALIA’S financial system needs to change to create a level playing field for customer-owned financial institutions, the Warrnambool-based South West Credit Union says.
South West Credit chief executive David Brown said more than three-quarters of people questioned in a recent survey believed the big four banks had an unfair advantage that should be addressed by the federal government’s Financial System Inquiry (FSI). He said an Essential Research survey of 1000 Australians revealed strong support for the FSI, with almost 80 per cent in favour of examining the market dominance of the big four banks.
Mr Brown said consumers had identified problems with the “one size fits all” approach to Australia’s financial regulatory system.
“We are seeing firsthand at South West Credit how the unfair advantages in the system have strengthened the market power of the big four banks,” Mr Brown said. “These unfair advantages ultimately mean less competition and less choice for consumers.”
Other key findings from the survey included:
n more than half those surveyed (57 per cent) believed there was no genuine competition between the big four banks;
n 82 per cent said it was important to look at whether regulation promoted or limited competition;
n 70 per cent said the big four needed stronger regulation to limit their dominance, and a similar number said regulation should not be one-size-fits-all;
n there was confusion about multi-branding by the big banks. Only 52 per cent of those surveyed knew St George was owned by a big four bank, and only 29 per cent for RAMS. Westpac owns both; and
n about 80 per cent said the customer-owned financial sector was an important part of the banking industry, providing vital services in regional communities and should be supported by the regulatory system to promote competition.