All this Banking Royal Commission stuff is interesting. One might argue that the Big Four banks didn’t get their fair share of the remedial work to follow. It also cost millions to reveal information that wise and motivated regulators, investors or laypersons already knew or could find for themselves with a bit of effort and shoe leather. But I view it as money well spent. It was important to air the industry’s dirty laundry and make more Australians aware of the nefarious corners of our oligopolistic financial system. To let future bank bosses, board members, governments and regulators know what we won’t stand for.
Flicking through the report, some of the suggestions are useful and some of the omissions telling. Lower hanging fruit has been left unpicked.
I’ve long pushed for an idea that would revolutionise the competitive dynamic between our banks. Customers would be able to get a better deal with ease. By amping up competition and arbitraging monopoly profits out of the system, I also suspect it would go at least half way towards solving the incentive and behavioural issues that dominated the Royal Commission headlines. A new law, which could be drafted in a single sentence, could spawn such change. Here’s my first attempt:
By 1 January 2022, the account numbers of all at call transaction and savings accounts, credit cards and variable rate loans of all types offered in Australia must be fully portable between Australian financial institutions, to be executed on request of the customer.
Account number portability would shift consumer behaviour and competitive response as surely as phone number portability did in telecommunications. This wasn’t a topic at the Royal Commission, nor is it one on the national agenda. It should be.
Functional cookies Always active
The technical storage or access is strictly necessary for the legitimate purpose of enabling the use of a specific service explicitly requested by the subscriber or user, or for the sole purpose of carrying out the transmission of a communication over an electronic communications network.
The technical storage or access is necessary for the legitimate purpose of storing preferences that are not requested by the subscriber or user.
The technical storage or access that is used exclusively for statistical purposes.The technical storage or access that is used exclusively for anonymous statistical purposes. Without a subpoena, voluntary compliance on the part of your Internet Service Provider, or additional records from a third party, information stored or retrieved for this purpose alone cannot usually be used to identify you.
The technical storage or access is required to create user profiles to send advertising, or to track the user on a website or across several websites for similar marketing purposes.