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Bankmecu has responded to yesterday’s Balanced Banking campaign by renewing its call for the federal government to deliver on its promise to increase competition and choice in banking for Australian consumers.
The Balanced Banking campaign is an initiative put forward by Abacus mutual and is aimed at politicians in the lead-up to this year’s election.
The independent lender’s managing director, Damien Walsh, welcomes the campaign, which claims to be supported by independent research showing that 65% of Australian voters think there isn’t enough competition in the nation’s banking system.
“There is growing concern that the major banks are creating a veneer of competition through their various sub-brands and consumers should expect greater disclosure of the facts.”
However, while Australian Banker’s Association (ABA) chief executive, Steven Münchenberg, tells Australian Broker the organisation generally supports enhanced competition in the banking sector, he believes consumers are ‘smarter’ than the anti-big bank campaign would suggest.
“We are supportive of ideas that remove barriers to smaller banks and mutuals being competitive – 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.”
#pb# Yet, he believes there is ‘a lot’ of competition in the marketplace.
“There’s a lot of choice and customers aren't afraid to shop around and change lenders if they are unhappy - one in three new mortgages are refinances.”
This message is echoed by Westpac senior media relations manager, Danny John.
"[Westpac’s]multi-brand approach recognises that customers have choice. Ultimately, people choose their bank because they like what it stands for and the quality of service it provides."
Another of the Balanced Banking messages is a claim that consumers aren’t being made adequately aware of major banks’ ownership of subsidiaries - but Münchenberg says this is a non-issue.
“We think consumers are smarter than Abacus has suggested in terms of knowing whether a brand is part of a larger bank or not and there are many smaller banks that are 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.”
#pb# Furthermore, he says the ABA wouldn’t support measures designed to reduce the competitiveness of major lenders, as he believes this would fail to produce positive outcomes for consumers.
“Rather, we should be looking for ways to strengthen the arm of smaller competitors if we want to enhance competition.”
Walsh, however, says he’d like to see the government require banks to prominently disclose ownership of wholly owned sub-brands in all advertising.
“Treasurer Swan must make this a priority and deliver on his promise to ensure that there is greater competition in the Australian banking market ahead of the Federal Election.”
