ACCC chair Gina Cass-Gottlieb
The yawning gaps and slender recommendations in the final report of the ACCC’s deposits inquiry mean there will be little change in the disparities and the dissatisfaction within the deposit taking and payments industry in Australia.
Incredibly there is no mention at all of the scourge of interest-free transaction accounts, an enduring feature of account design exploited to the hilt by the big banks especially.
Banks need to throw these legacy products away and pay something, anything on basic accounts.
When money was practically free this habit was defensible but now and across decades of industry history money was anything but free, and these margins mattered.
Banking is an inefficient, high cost and unevenly-run industry.
The banks can do without these lazy profits and these interest-free products need to be overhauled.
Also absent from the ACCC’s report was analysis of the generous deposit offers to on term deposits to government agencies, local councils and superannuation funds.
Most deposit offers in the retail market are made at a material discount to the rates widely offered to institutional banking clients.
The ACCC elected to review a narrow band of deposit products – principally the mislabelled ‘bonus accounts’ - and to advocate for more consistent account comparison services and simpler switching.