An experiment in people power

“Knowledge must come through action,” observed a very wise man about 2,500 years ago. While Sophocles was not referring to the Australian banking sector, the ancient Greeks did know a thing or two about people power.

The CHOICE Big Bank Switch is an experiment in people power. Although not quite on par with the invention of democracy, the concept of group switching is all about putting power back into the hands of consumers – the most important people in Australia’s banking sector.

For CHOICE, this is an unprecedented consumer action. We simply do not know if it will ultimately succeed. But from our actions, we have already gained some worthwhile knowledge.

Firstly, we have found overwhelming community support. This is clear through the actions of more than 40,000 consumers who registered for the Big Bank Switch in just two weeks.

It is true that a handful of our members are asking very reasonable questions about this initiative. We respect these views, and must always rise to their expectations. And just as the majority of comments we have received have been positive, our membership has continued to grow.

Secondly, we have learnt that when you attempt a large-scale market intervention, it will ruffle a few feathers. All the more so when you intervene in a market like the banking sector, where consumers have traditionally lacked power.

CHOICE is a campaigning organisation, and we must expect to get as good as we give. However, we cannot let some claims go unanswered, especially when they come from certain banking and other financial industry associations; those you might think have a lot to lose from a successful experiment in people power.

So let me be clear; through the Big Bank Switch, as in previous campaigns, we are seeking ongoing guidance from ASIC, as well as legal advice to ensure we are fully compliant with all legislation. We are not, as some have falsely claimed, a part of a formal ASIC inquiry.

CHOICE will be paid a fixed dollar fee that is product neutral for anyone who switches their loan under the campaign. Consumers will know the exact fee CHOICE will receive prior to deciding whether or not to switch. It would be a fine day for consumers if even half this level of transparency and neutrality was adopted by some of our critics.

CHOICE is not a financial adviser or mortgage broker. Moreover, we have no role in discussions with lenders under the Big Bank Switch campaign.

But we are willing to try innovative market interventions that offer some prospect of putting power back into the hands of consumers. On that score, we are – and will continue to be - completely biased.

To quote another great thinker, this time of the 20th Century: ‘At first they ignore you, then they laugh at you, then they fight you, then you win.’ On behalf of Australian consumers, we are engaged in a fight to put the consumer interest at the forefront of the financial services sector, and with your help, we will win.