As the ‘big four’ banks face the government’s royal commission into alleged misconduct, smaller community-owned banks or credit unions could see a spike in membership.
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WAW Credit Union’s chief executive Michael Mack said there was chance people would turn away from the big four banks; ANZ, Commonwealth, Wespac and NAB, during the 12-month Royal Commission into Banking, Superannuation and Financial Services Industry.
Neither WAW Credit Union, nor Hume Bank, have been accused of any misconduct, or asked to attend the commission.
Mr Mack said the commission was a terrific time for the customer-owned banking sector to show they’re setting the standard of industry ethics and have done so for decades.
He said the customer owned sector, and now made up of about $100 billion in assets.
“It could give our sector a leg up,” he said.
“We’re hoping the commission will raise awareness and say these values and community expectations are important.
“The best way to get big companies to change their behaviour is for people to vote with their feet.”
Mr Mack said smaller players in the industry have no desire to disrupt the banking sector and the major banks, but the sector works best when there is competition, something he believes has been stifled in recent years.
“The way to get the system to change is by promoting those doing the right thing,” he said.
“We hope the federal government and policy makers realise they have a role to play to help support competition.”
Hume Bank’s chief customer officer and acting chief executive officer Andrew de Graaff said smaller, community based financial institution had slowly been taking back their share of the market, even prior to the calling of the commission.
He hopes the commission enhances the competitiveness of smaller institutes and put trust back into the wider industry.
“There has been a trend recently with smaller player and mutuals becoming more competitive and you are seeing them slowly take back the market share,” he said.
“Mutuals are getting better at being able to provide great services and offers to customers beyond just price.
“And technology has allowed customers to not feel isolated to a region.”
Mr de Graaff said the major banks decisions to stop ATM fees benefited smaller institutions with a physical metro presence.
He said Hume Bank had also seen a steady re-connection of customers who left the bank for a major, and were now returning.
Digital journalists with The Border Mail.
Digital journalists with The Border Mail.
