People feel 'like bank hostages'

AUSTRALIAN bank customers believe it is too difficult or costly to change their bank, says a study.

Almost 40 per cent of customers of the big four banks want to leave their bank after recent rate rises / File

AUSTRALIAN bank customers believe it is too difficult or costly to change their bank.

According to research that supports Government intervention for greater competition in retail banking, a poll conducted by Essential Research shows that despite a growing level of dissatisfaction with the major banks, consumers believe they face too many obstacles in changing institutions.

Of those surveyed, 37 per cent of customers of the big four - the Commonwealth, ANZ, Westpac and National Australia Bank - said they had considered leaving their bank following recent interest rate and fee increases.

Forty-one per cent of these customers said it was too difficult to change banks, while 23 per cent said there were fees and charges attached to shifting.

Twenty-eight per cent said there was no point, as all banks were the same.

And 40 per cent of all those surveyed said they considered dumping their bank at some point during the past five years, although two-thirds stayed with their current institution.

Mark Degotardi, acting CEO of Abacus-Australian Mutuals, which represents building societies and credit unions, said customers of the big four "feel trapped".

"They are not happy with the service they are getting from the major banks," he said.

"The Government has made it clear it will promote competition by supporting credit unions, building societies and smaller banks."

However, Commonwealth Bank boss Sir Ralph Norris has warned against such regulation: "I think regulators and politicians have to be careful of the sort of policy prescriptions they put in place, because there is always the law of unintended consequences."