Australian financial system is “a joke”: Finder.com.au

Australian financial system is “a joke”: Finder.com.au
Jennifer DukeDecember 7, 2020

finder.com.au’s co-founder Fred Schebesta has urged Australia’s banks to become more accountable and independent.

Speaking about the Financial System Inquiry report released over the weekend, he said that we welcomes the inquiry, which makes clear that Australian banks are not even close to being globally competitive.

“Australian banks are not even close to being globally competitive in so many ways. This is insular thinking from an insular country that needs to think about actually being globally competitive for any future chance of expanding,” Fred Schebesta said.

He went on to say that Australia needs to “stop being a little island”.

“Start earning profits not just from Australia but from all around the world. Australia could become the new global Switzerland of finance with global banks around the world,” he said.

“Comparatively, the Australian financial system is a joke – we’re isolated and currently pretty terrible at integration. There’s some huge risks, for example the big four banks are so similar in business structure that it’s crucial they take on more capital – if something comes along and cripples our economy, we’re going to see all four crumble in the exact same way.”

He said that the Inquiry is a wake up call for Australia with one of the main issues being a lack of transparency.

“It’s great to see that a key message from the Inquiry was the need for more transparency. It’s about time it was seriously recognised that guidance and disclosure needs to be improved, especially in general insurance,” he said.

“It’s not fair that some institutions purposefully hide who they are owned by because they don’t want people to know that they favour or conflict with the provider. Institutions need to understand that hiding their identity makes them untrustworthy to the public.”

He said that all financial and any advice from comparison sites, brokers, financial institutions and others in Australia should disclose their ownership structure. He also said that more disclosure around pricing is necessary.

“This will give consumers a much clearer perspective on the incentives that are driving the decisions of that entity,” explained Schebesta.

“I think consumers will start getting more independent advice which will mean better financial outcomes for Australians.”

You can read Property Observer’s analysis of how comparison websites make money here.

Jennifer Duke

Jennifer Duke was a property writer at Property Observer
Tags:
Economy

Editor's Picks