Published on October 5, 2016 12:46 pm, by Pete Lalor
Increased competition and innovation – surprising outcomes from Day 1 of Bank Public Hearings
Yesterday was round 1 of the annual Parliamentary Public Hearings into Australia’s big banks. Ian Narev, the CEO of Commonwealth Bank was on stage for 3 hours of questions from MP’s.
Among the range of topics we expected to be covered – things like why Commonwealth hadn’t passed on the last cut in official interest rates in full, the massive profits made by Australian banks, the ongoing poor treatment of the bank’s life insurance customers and stubbornly high credit card interest rates – were some really interesting questions about competition, innovation and customer service. For us, the highlights were making customers banking data more accessible and introducing bank account portability.
Banks need to make data more accessible
It is clear from some of the questions, particularly those from Committee Chair David Coleman, that pressure is building to make customer data more available and switching banks easier.
The UK Regulators Open Data Initiative was cited as an example of how customer data could be made more available to improve customer service. Under the initiative, UK banks must make customer data available through standard API interfaces by 2017. It’s hoped that this will increase innovation in the financial services industry. Customers would then be able to easily and securely authorise service providers to access their information to help them better manage their money.
The hope is that this would increase innovation in the financial services industry and
Bank account portability could help increase competition
The committee also questioned Narev on the idea of bank account portability – the idea that a customer could retain their bank account number as they switched banks and therefore not have to change direct debit and direct credit details. An initiative like this might finally realise the vision set out by the Federal Government in 2010 to increase competition among banks by making it easier to switch bank accounts.
We think both these initiatives would deliver tremendous benefits for customers and strongly support them. We believe that customers should be able to easily and securely authorise other people to use their banking information and If phone companies can provide phone number portability it seems reasonable for banks to provide account number portability.
Something like “Commonwealth welcomes competition, but these changes will be costly and risky’. A pretty standard response for all changes designed to produce better outcomes for customers.
Peter is the CEO of MoneyBrilliant. He has over 20 years experience in banking, insurance and accounting. Peter has three sons, ranging in age from 16 to 3, is a sport and fitness fanatic and a volunteer firefighter. He is passionate about improving people's lives through making financial services more accessible.