Campaigning for better banking is a bit like the start of the footy season. We begin as optimists, trying to forget the disappointments of last year, the unfair penalties and questionable free kicks, hoping instead for some healthy competition.
That is where the similarities end. While other national sports have salary caps and at least the semblance of a level playing field, our big four banks have spent the pre-season again demonstrating why they are about as popular as a tram of drunk Collingwood supporters.
Recent weeks brought interest rate rises outside of the Reserve Bank cycle and more record profits, set against a backdrop of outsourcing, job losses and tales of high-seas parties that could put ‘mad Monday’ to shame. Even the most hardened optimist would admit there seems more chance of Russell Crowe’s Rabbitohs claiming the NRL trophy than our major banks putting customers first.
What does it matter, you might ask? That is certainly what the banking industry say, making grave pronouncements about healthy profits at a time of global instability and wringing their hands over the increasing costs they have no choice but to pass on to consumers.
This argument is complex and well-rehearsed. It is also rubbish. Yes, healthy banks are incredibly important, the global climate is uncertain and some funding costs have increased. But our banks do have a choice about the costs they pass through to customers, and saying they don’t is the surest sign of how they take Australians for granted.
We can’t live without the banks. Whether we work or receive benefits, rent or pay off a mortgage, save or spend, they provide an essential service. However there is another side to this story, and that is why we think it's time for consumers to remind the banks they cannot live without every one of us.
Move Your Money campaign
We launched the CHOICE Move Your Money campaign to send the big four a message in a language they understand. Our campaign is calling on thousands of Australians to sign the Move Your Money petition, pledging their willingness to shop around for a better deal beyond the ‘big four’ and if they find one, switch and save.
Our bank satisfaction survey consistently shows that smaller institutions, including credit unions and mutuals, come out trumps, winning customer loyalty not just through great service and values but also competitive products.
Our survey also shows that two of the biggest barriers to switching are consumers’ perceptions there are no better deals out there and that switching is too hard. But experience shows us these perceptions are often false.
Move Your Money aims to break these barriers, revealing a whole world beyond the big four, whether it is home loans, savings or transaction accounts or credit cards.
$166 billion earning little or no interest
We are at the very start of the Move Your Money campaign in Australia, but the potential is massive. For example, new CHOICE research estimates Australians keep around $166 billion in transaction accounts with the big four that earn little or no interest. That is enough to roll out the National Broadband Network almost five times or stage 12 London Olympics.
It is also a giant free kick for the big four banks, as we conservatively estimate they make over $7 billion from using our money to lend and earn interest – and that does not include the $4.24 billion in fees collected on everyday banking products in 2010.
The big four may not be listening to the RBA or the government, but we think they will listen to consumer power. Like in the United States, where Move Your Money has already inspired a shift of four million accounts from ‘Wall street to Main Street’, it is time for Australian consumers to put some competitive pressure back on the banks and make them work for our business.
Because unlike the footy, there is no pride in staying loyal to a losing side, and this is one competition where consumers need to come first.
Sign the CHOICE Move Your Money petition to send your message to the banks.