Abacus backs account switching package
09 February 2008
Credit unions and mutual building societies support practical measures to promote competition in the retail banking market by making it easier for customers to switch accounts.
Treasurer Wayne Swan’s account switching package is practical and pro-competitive.
"The customer-owned banking sector stands to benefit from moves to facilitate account switching because our customer satisfaction ratings strongly outperform the major banks," said Louise Petschler, chief executive of Abacus – Australian Mutuals.
Abacus is the industry body for Australia’s 146 credit unions and mutual building societies. Mutual banking institutions collectively rank second only to the Commonwealth Bank in their share of the household deposits market.
"The latest Roy Morgan Research survey of customer satisfaction found that 88 per cent of credit union and building society customers are satisfied compared to 71 per cent of customers of the 4 major banks*," Ms Petschler said.
"Our high customer satisfaction ratings reflect the fact that mutuals don’t have to put shareholders ahead of customers. Our customers are our shareholders – they own the place.
"Unlike banks, credit unions and mutual building societies do not have to pay dividends to shareholders and therefore they can focus on providing better service, fairer fees and support for their communities.
"The Roy Morgan survey found that 9.4 per cent of customers* of the 4 major banks are dissatisfied. This contrasts with the much smaller estimate - 3.1 per cent - by the Australian Payments Clearing Association (APCA) of financial institution customers that annually switch accounts.
"The obvious implication is that there are barriers to customer mobility and account portability.
"Consumer perceptions about the hassle involved in switching accounts are probably worse than the reality, but practical measures to promote switching will help overcome these perceptions.
"Abacus is on record since last October supporting simple, practical measures as proposed in APCA’s 2007 Consultation Paper Aspects of Account Switching, in particular the proposal to give departing customers a list of their regular direct debits and credits.
"We welcome the urgency that Treasurer Swan has brought to this issue."
* Based on 6 months to December 2007.
For more information:
Louise Petschler - 0408 239 226 or
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Mark Degotardi - 02 8299 9053, 0419 998 201 or
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