ACCC chair Gina Cass-Gottlieb calls for banking competition reform

Gina Cass-Gottlieb has criticised the lack of competition in the banking sector, calling for reforms to make it easier for bank customers to switch home loans and compare deposit products.

ACCC chair Gina Cass-Gottlieb: ‘Competition … is key to keeping retail prices at efficient and affordable levels.’ Picture: Sam Ruttyn

The chair of the Australian Competition & Consumer Commission, Gina Cass-Gottlieb, has criticised the lack of competition in the banking sector, calling for reforms to make it easier for bank customers to switch home loans and compare deposit products.

Speaking at a forum on financial services, hosted by law firm Gilbert + Tobin in Sydney on Thursday, the ACCC chair said there were concerns about a lack of competition in the banking sector, particularly in retail banking.

“Two major pieces of work undertaken at the ACCC over the past several years – our retail deposits and home loan pricing inquiries – have highlighted ongoing challenges as well as some opportunities to improve transparency,” she said.

She said the lack of competition in the sector was compounded by Australians having low levels of engagement with financial services and a reluctance to switch between financial products.

“In these times of continuing high interest rates, it is more important than ever that consumers have access to a wide range of ­financial products and services and that they are able to compare offers and seek the best value for their needs and budgets,” she said.

“Choice and competition in the financial services sector are key to keeping retail prices at ­efficient and affordable levels.”

She said pricing strategies adopted by the banking sector made it difficult for consumers to compare products, noting was also a “lack of consistency between bank websites and conflicted commercial arrangements with comparison websites” which made it even harder for bank customers to compare products.

“These issues persist, in part, due to a lack of competition in the retail banking market,” she said.

Other reforms advocated by the ACCC include making it mandatory for banks to notify customers when interest rates change or when introductory rates ended, and making it easier for comparison between products offered by banks as well as disclosing ties they have with recommended product providers.

Ms Cass-Gottlieb’s comments come after the Australian Competition tribunal’s move in February to overturn the ACCC decision blocking the ANZ merger with Suncorp’s banking arm.

While the tribunal had overturned the ACCC’s earlier move to block the deal, the ACCC chair said there was agreement between it and the tribunal that the reluctance by Australians to switch financial products exacerbated the problem of lack of competition in the banking sector.

Ms Cass-Gottlieb said the ACCC was working with the Council of Financial Regulators, which was undertaking a review of competition in the small to medium-sized banking market including the impact of regulation on their operations.

“The ACCC is very pleased to be participating in this review, with a view to finding ways to appropriately balance competition, innovation and stability,” she said.

Ms Cass-Gottlieb also moved to assure business about the impact of tougher new merger laws, saying that some 80 per cent of merger applications would be approved within 15 to 20 days.

The merger legislation, introduced into parliament in October, requires mandatory notification to the ACCC of merger deals and has led to concerns in business that the process could cause delays in the approval of proposed takeovers.

“Under the new regime, we expect that approximately 80 per cent of mergers will be cleared within 15 to 20 business days,” she said. The ACCC would be focusing its attention on potential mergers which were “more likely to harm the community”.

The changes will mean that all takeover and merger deals above a certain threshold will need to be notified to the ACCC and receive approval before they can proceed.

It represents a shift from the regimen of voluntary notification to the ACCC in cases where the proposed deal could risk substantially reducing competition.

Ms Cass-Gottlieb said the changes were relevant for all businesses that could be affected by a merger including suppliers, customers and rivals, in addition to the companies directly involved.

She said they would benefit business stakeholders by ensuring they had “clarity on their obligations, the time frames they can expect, and other key aspects of the process.”

“It will also provide greater transparency and opportunity to comment on transactions before the ACCC for the wider community, including consumers and small businesses,” she said.

The new regime will come into effect from January 2026.