SYDNEY-- Three-quarters of respondents to a survey commissioned by the Customer Owned Banking Association (which includes credit unions) say the big banks do not disclose their ownership of alternative banking brands clearly enough, which the credit union lobby group says is restricting genuine competition.
The Customer Owned Banking Association (COBA) have said in response to a government inquiry that the major banks have been portraying their sub-brands as independent competitors and are designed to lure customers who don't want to bank with a major bank. The sub-brands include Bank of Melbourne, St George and BankSA (all owned by Westpac Banking Corp); UBank (National Australia Bank), and Bankwest (Commonwealth Bank of Australia), according to the Sydney Morning Herald. The major banks also own a range of mortgage brokers trading under different names.
Mark Degotardi, CEO of COBA, said members of his association want the sub-brands "to be required to clearly and prominently disclose in all advertising and all customer-facing material that they are owned by a larger organization. This would promote genuine competition in banking because it would be easier for consumers to exercise real choice."
In a poll of 1,000 people sponsored by COBA, 1,000 people were asked by Essential Research who owned the list of major multibrands; for most, more than half of respondents were unsure.
Fifty-six per cent of respondents said they were concerned that bank customers may be unaware their bank is actually owned by one of the big four banks. Just under three-quarters of respondents thought banks are not clear enough about their ownership while just 10% thought that they are. Eighty per cent of respondents said they agreed with the proposition that smaller banks owned by larger ones should clearly and prominently state this on their advertising and customer material. Three-quarters said laws should be introduced to make ownership of financial institutions more transparent.