Online lender loans.com.au has welcomed reports that the Australian Competition and Consumer Commission (ACCC), is pushing for an inquiry into competition in the banking sector, in order to promote fairness for consumers.
Managing Director Marie Mortimer said the market domination of the Big Four banks was the root cause of all the problems in the Australian banking sector and new competition isn’t coming to the market quick enough.
“When you look at the issues that have led to widespread anger and distrust of banks – like excessive CEO pay, cross-selling of products, vertical integration, and bad pricing – all of these come back to the size of the Big Four,” Ms Mortimer said.
“It may seem like we’ve had too many inquiries – and I know we are all sick of reading about it - but until our regulators start asking the right questions about the monopoly the Big 4 holds over Australia they are never going to find the answer to fixing our banking system and restoring trust.”
Ms Mortimer said that the domination of the Big 4 was an entrenched problem that had been around for decades and while there have been legislative reforms such as consumer data right (CDR) and New Restricted ADI licensing schemes for neobanks, it is slow going and not making the impact the government thought it would.
“There have been big problems since 1990 when the Four Pillars policy was put in place, and three decades and seven Prime Ministers later the Big Four continue to dominate again and again,” Ms Mortimer said.
“It is time that we had in inquiry that focused purely on this issue of competition, from a regulator that has powers to do something about it, and found solutions to encourage the development of major competitors to the core business of the big bank oligopoly.”
Ms Mortimer said that loans.com.au, and its parent Firstmac, were one of handful of lenders using FinTech to build a meaningful capacity to take on the big banks in their coveted market of prime home loans.
“We have grown rapidly from nothing eight years ago to almost $6 billion in loans under management today so we know it can be done with the right mix of products and service, the question is how to step that up even further,” Ms Mortimer said.
“The solution isn’t all with the government – we as Fintech’s must also support each other to break down the assumptions that lead to 60% of home buyers taking out an overpriced mortgage with their existing bank instead of shopping around.”
Loans.com.au is currently offering a Smart Home Loan special, starting at 3.03% (3.05% comparison rate), which is significantly cheaper than any of the Big 4.
Founded in 2011, loans.com.au has grown to become Australia’s largest online lender in the fintech space, with thousands of happy customers across Australia. Loans.com.au is backed by the financial strength of our parent company Firstmac, which is a leading non-bank lender. Firstmac has been operating successfully for almost 40 years and it has $12 billion in mortgages under management.