Consumers are sceptical about the transparency of banks, with a recent consumer survey revealing that 84% of respondents think banks should have to disclose who owns them in any advertising.
The consumer survey, conducted by People’s Choice Credit Union, also found that two-thirds of respondents thought that multi-branding was used to trick customers about ownership.
“Multi-branding is simply unfair because it creates artificial competition. The fact is, many of the smaller financial institutions out there are owned by the Big Four, which are trying to hide that ownership," Peter Evers, managing director of People’s Choice said.
People’s Choice is calling for regulation that makes it compulsory for banks to disclose their ultimate ownership prominently and clearly in all advertisements. Consumers cannot make informed decisions without transparency, according to Evers.
“If you believe in fair play, if you believe in a genuinely competitive market with real choice, consumers need to be able to easily understand the true identity and regulatory status of the entity they’re dealing with. Major banks hide behind sub-brands that look like regional banks or non-banks. Consumers need real choice through clearer and more effective disclosure,” he said.
This call for greater disclosure is supported by COBA, the Customer Owned Banking Association, which represents credit unions, building societies and mutual banks.
The People’s Choice survey involved 1,520 people and was conducted by the Ehrenberg-Bass Marketing Institute.