Safe as banks: credit unions and building societies
16 April 2010
BrandCentral research reported today in the Australian Financial Review found that customers believe credit unions and building societies behave more responsibly than the major banks but customers are still more likely to take their business to the big four lenders.
According to the report, customers believe there is less choice, less independence and less competition.
"This situation demands a stronger response from the Government," says Louise Petschler, Abacus CEO.
"Major banks continue to benefit from entrenched misconceptions about the regulatory framework and the perception that there is no real choice in the banking market.
"Credit unions and building societies are strongly capitalised, have much lower non-performing loan ratios than banks, and are regulated in exactly the same way as banks by exactly the same prudential regulator, APRA.
"We are calling for a pro-competitive public awareness campaign about the prudential standing of all banking institutions to educate the market that genuine choice exists beyond the four major banks and their various brands such as St George and Bankwest.
"Such a campaign could be funded by spending a tiny fraction of the $5.5 billion in fees flowing to the Government from the Guarantee Scheme for Large Deposits and Wholesale Funding.
"This latest research shows that the false perception that the major banks are more safe and secure is hard to budge. That's why there is a strong case for the Government to intervene with a public awareness campaign," Petschler says.
For more information, please contact:
Pamela Eldridge
Senior Adviser - Media, Public Affairs
(02) 8299 9024; 0423 843 790;
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