HomeView 2014 Media ReleasesMake it easy for consumers to tell a ‘local’ bank from a major bank

Major banks will have to rethink their multi-brand strategies if the Financial System Inquiry (FSI) this month recommends changes to disclosure rules to better inform and empower consumers.

“Major bank multi-brand strategies are intended to lure customers who don’t want to bank with a major bank,” said COBA Acting CEO Mark Degotardi.

“Our consumer research suggests major banks are getting away with portraying their sub-brands as independent competitors,” Mr Degotardi said.

“The FSI interim report flagged the need for disclosure reform and ASIC’s second-round submission to the FSI said reforms should be considered to allow consumers to make an informed decision about who they are dealing with.

“We strongly endorse ASIC’s observation that ‘consumers who choose a particular brand to deal with may not realise that the brand is owned by and operates under the banking licence of a larger banking institution.’

“This month Westpac sub-brand Bank of Melbourne commented that ‘there is a large proportion of the population who want to bank with a local bank.’

“We wholeheartedly agree with that observation but Bank of Melbourne is certainly not a local bank. Bank of Melbourne is a wholly-owned subsidiary of a Sydney-based major bank.

“There are plenty of locally owned and operated banking options in Melbourne, but consumers shouldn’t be under the misapprehension that Bank of Melbourne is one of them.

“Other major bank sub-brands include RAMS, UBank, Aussie Home Loans and Bankwest.

“These sub-brands should clearly and prominently disclose in all advertising and all customer-facing material that they are owned by a major bank.

“This would promote genuine competition in banking because it would be easier for consumers to exercise real choice.

“Major banks posing as local banks, regional banks or non-banks is not genuine competition,” Mr Degotardi said.

For more information please contact:

Daniel McDougall, Senior Manager – Media and Communication
02 8035 8444 or 0407 637 541, This e-mail address is being protected from spambots. You need JavaScript enabled to view it

Customer Owned Banking Association is the industry body for credit unions, building societies, mutual banks and friendly societies.  See coba3.nexusone.com.au

Download PDF release here95.24 KB

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Media Contacts

Mick Gibb
Corporate Affairs Manager
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M: +61 423 149 494
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