In their submission to the Financial System Inquiry BankMECU have called for transparency, diversity and sustainability. However the focus of the ‘transparency’ claim is the call to”require all bank sub-brand advertising to reveal the owner bank, with the owner bank name shown with equal prominence as the bank sub-brand.”
This is directly targeting the big four who now control brands such as Bankwest, St George, Bank of Melbourne, Bank of SA, RAMS, Advantedge and others. This may be a fair call as taking a quick look at the RAMS web site for example you have to dig quite deeply to find any reference to Westpac’s ownership. It is probably fair that customers should realise from the beginning of the loan application process just who they are really dealing with. For many customers this realisation may not become apparent until the mortgage documents arrive for signing. Of course by this stage in the application process it is usually far too late to change your mind.
The submission also calls for “the Australian Government commit to a policy position of competitive neutrality”. Government policy in reaction to the GFC was very much focused on protecting the big four banks and as a result they were able to accumulate and grow to complete dominance with at one stage over 90 percent of all home loan applications being handled by them.
In recent years the second tier and non-bank market has recovered and once again we have a reasonably competitive banking market however the major banks through their established market share and sub-brand outlets continue to dominate the market.