Bankmecu’s managing director, Damien Walsh, is calling on the Australian government to require banks to prominently disclose ownership in all advertising of wholly owned subsidiary sub-brands.
In a statement released this week, Walsh says that, for instance, customers taking up Bank of Melbourne’s new promotional rates should be made aware that they’re actually banking with Westpac.
A Westpac spokeswoman however says such a legislative change is unnecessary.
"Bank of Melbourne has brought real competition to banking by consistently offering Victorians a better deal. Banks that offer relevant and competitive products and services will win customers. In our advertising we clearly state that we are a division of Westpac," the spokesperson said.
But Walsh says this isn’t always the case.
“Multi-brand strategies being executed by the major banks are creating a false perception that there is competition in the banking market place because there is no transparency in the marketing of the sub-brands.”
He says the government has already set a precedent for helping consumers make informed decisions, after bringing in legislation requiring financial institutions to publish a comparison rate alongside the offered rate.
In a survey of more than 1000 Australians conducted by Bankmecu earlier this year, Walsh says 74% of respondents said they would support requiring banks which are wholly owned by other banks to disclose their ownership in their advertising.
“This is an easy and simple step that the Government can take to deliver on its promise to ensure that there is competition in the Australian banking market by helping consumers to make informed decisions about their banking.”
Westpac currently operates a multi-brand strategy that includes subsidiary lenders Bank of Melbourne, BankSA and St George, while The Commonwealth Bank owns Bankwest.