They say that “bigger is better”, but the aphorism may not hold when it comes to the multibillion-dollar banking sector.
The aphorism goes that “bigger is better”, but that may not seem the case with the multibillion-dollar banking sector.
This means that Australian banks have a lot of power to flex. The bigger a company is, the harder for competitors to put up a fight. And the less competition, the more those big companies can set their own terms. In the business world, less competition – as a rule – means firms can charge customers more.
Few sectors in Australia are as uncompetitive as banking, and it has meant over the years that the big four have become some of the most profitable banks in the world.a bad thing. Some credit the strength and stability of the Australian banking system for the country’s resilience during the global financial crisis, and when the failure of Silicon Valley Bank in the US sent shockwaves throughout the world this year, many were assured by the robustness of our banks.
Neobanks including Judo and Tyro have caused some disruption, alongside regional banks, but the biggest feather-ruffler recently has been Macquarie Bank.
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