Following reports that the Australian Competition and Consumer Commission (ACCC) is pushing for an inquiry into competition within the banking industry, Australia’s customer owned banking sector has welcomed the initiative and reiterated its view that competition must be better promoted for the sake of the consumer.
According to Customer Owned Banking Association (COBA) CEO Michael Lawrence, “We strongly support the ACCC’s calls for an inquiry to examine the banking industry’s competitiveness [as] we don’t have sustainable banking competition at the moment.”
“A lack of competition can contribute to inappropriate conduct by firms, insufficient choice, limited access and poor-quality products for consumers.”
Credit unions, building societies and mutual banks have been actively campaigning for a more competitive retail banking market, with over 30 CEOs and directors gathering in Canberra just last week to urge Parliament to keep competition at the forefront of the implementation of the royal commission recommendations.
COBA feels that the regulatory framework that has been developed over time has “entrenched the dominant position” of Australia’s major banks.
Lawrence said that last year’s Productivity Commission report on competition in banking sent “strong messages” to policymakers that regulation is hurting competition – and that it’s consumers who are paying the price.
“The Productivity Commission found that competition drives innovation and overall value for customers. [It also] shone a light on a problem that is not well enough recognised – that more and more regulation can be harmful to consumers because it weakens competition,” he added.
“The Financial Services Royal Commission looked into misconduct, now is the time to look into competition.”