I must say I am finding the banking competition inquiry a bit too cosy and friendly. Not a great deal of hard questioning from our Senators to the bankers or non-bankers or consumer reps.
As someone who has written about banking and interest rates from the CONSUMER perspective for some time now, the Treasurer's "reform" package and ideas being recommended during the public hearings are classic deck chair re-arranging.
Competition between banks and non-banks, banks and mutual deposit-takers such as credit unions will not improve until consumers demand a better deal.
Initiatives to improve financial literacy in this country over the past 10 years have not garnered great outcomes. Many Australians still do not understand their mortgages, realise how interest is calculated on either their savings or credit contracts. They don't even keep track of what they are earning and spending. Until that changes, the banks can continue to get away with peddling complex, incomprehensible contracts that bind the uneducated customer to their brand for longer than necessary.
It will be customers that make the financial services marketplace truly competitive and while we are all slaves to our offset accounts and credit cards, the level of awareness and effort needed to drive a truly good deal, simply won't exist.
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