According to Heritage Bank CEO Peter Lock, the consumer benefits of the mutual banking model are so clear and compelling that the federal government should take concerted action to educate people about the sector and its advantages.
The CEO claimed that if the government truly intends to address the failings of the big banks uncovered during the royal commission, something needs to be done to help the many Australians who do not fully understand the difference between the listed bank model and the mutual model.
“There is undeniable evidence that banking with the customer-owned sector delivers many benefits for consumers. More Australians need to know why,” Lock said.
Mutuals boast high levels of customer satisfaction, earn and hold their members’ trust, are recognised on an international scale and save their customers money; yet, the “disappointing” research Heritage commissioned in 2018 revealed around 59% of those surveyed were not able to explain what a customer-owned bank is at the most basic level.
“When people understand how the customer-owned model works, they also understand why it delivers so many benefits. However, there is confusion out there about how customer-owned banks are different,” said Locke.
“Everyone in this sector is doing their bit to educate people about how our model is different, but we are up against the deeper marketing pockets of the big banks.
“A simple way to promote greater competition in the banking sector is for the federal government to do more to educate people about how the customer-owned model works and why it is different to the listed bank model.”
As Lock sees it, a “good start” would be the creation and launch of a marketing and advertising campaign supported by the government.
“It’s simply about helping understand the different banking models in operation in Australia,” he said.
“That awareness is the critical first step in creating a more informed choice for Australia’s banking consumers.”
