A long-awaited review into the finance sector has failed to address issues around bank advertising practices such as multi-branding, despite highlighting concerns around a lack of competition in the industry.
The Financial Systems Inquiry (FSI) aims to start the process of reform in the finance sector and create a blueprint for it going forward. The interim report was released in July, with the final report issued on Sunday.
Customer-owned bank CUA has been vocal on the issue of multi-branding in the past and it formed part of the organisation's submission to the inquiry. CUA CEO Chris Whitehead said while the final report was “encouraging” in supporting moves for greater competition, it doesn't go far enough.
“There is a lack of transparency in the marketplace with advertising,” Whitehead said. “It isn't clear that organisations like BankWest, St George or Bank of Melbourne are all owned by the big banks.”
“That is important because many people specifically don’t' want to deal with the major banks.”
Whitehead said this advertising approach is a competition issue which is “confusing the marketplace”.
“The fact that multi branding is there and that the major banks are so defensive of it highlights the agenda and the effectiveness,” Whitehead said.
“It's an important issue when you've got four companies with over 85% of the marketplace, and anything that muddies the water for competition is an issue.”
Whitehead pointed to recommendation number 30 in the report around “strengthening the focus on competition” as recognising issues around branding, but said it wasn't explicit enough. He said going forward, CUA will use that recommendation to lobby for branding to be a specific mandate.
“If banks want to use multi-branding I think it's fine,” Whitehead said. “But we think that what is really important is that there is clear disclosure. In financial services you really do want to know where your money is. It should apply across the board and that would make it much clearer for genuine competitors like CUA to get noticed.”
For more news:
Bank branches in the pocket as Aussies embrace m-commerce
CUA blasts big four banks' chameleon approach to sub-brands
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