Big bank customers want more information and real choice
25 November 2010
Australian consumers want more information about alternatives, and believe that it is too difficult or costly to shift away from the big banks.
Results of an Essential Research poll conducted last week show a growing level of dissatisfaction with the major banks, but that consumers believe there are too many obstacles to changing.
There is also a strong call for Federal Government action to promote competition and support credit unions, building societies and other lenders.
Mark Degotardi, Head of Public Affairs at Abacus – Australian Mutuals, said recent interest rate rises by the major banks had left customers unhappy and looking for alternatives.
"Customers are feeling trapped. They are not happy with the service they are getting from the major banks, but are unsure about how they can change and worried about being hit with unfair costs if they do," Mr Degotardi said.
The research showed that 37 per cent of customers of the big four banks said they had considered leaving and finding a new financial provider due to the banks recent behaviour.
40 per cent said they had considered changing their main bank at some point in the last five years, but two-thirds of this group ended up sticking with their current bank.
Of those that wanted to change but didn't:
- 41 per cent said it was too difficult;
- 23 per cent there were fees and charges attached to shifting;
- 28 per cent said there was no point as all banks were the same.
Respondents said they believed the major reason people stick with the major banks is a lack of information about the alternatives (43 per cent), while 24 per cent say it is because it is too hard to shift from your financial provider. Only 29 per cent say that the bigger banks are more secure, and only 18 per cent say they offer better services.
The survey showed that consumers support the Federal Government's actions to promote competition and give consumers real choice.
- 79 per cent agreed that the Federal Government could be doing more to promote competition in the finance industry.
- 84 per cent agreed that the Federal Government should encourage policies to make shifting accounts easier.
- 75 per cent believed the Federal Government should push policies that support credit unions and building societies in the finance sector.
Mr Degotardi said Abacus welcomed public debate about banking competition and the focus of the Government on possible reforms.
"The Government has made it clear that it will take action to promote competition and we appreciate the recognition our model is getting as part of this debate.
"Credit unions and building societies support competition. We're hopeful the competition reform package, once announced, will target barriers to choice and look at ways to improve funding for competitors to the big 4 banks," Mr Degotardi said.
He said that credit unions, building societies and other lenders offered genuine choice to consumers, and could often deliver lower interest rates.
"Credit unions and building societies are strong, secure and regulated the same way as banks. And they are ready to put competition back into retail banking and give Australian consumers a better deal," Mr Degotardi said.
For more information, please contact:
Pamela Eldridge
Senior Adviser - Media, Public Affairs
(02) 8299 9024; 0423 843 790
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