Australia’s financial system has changed beyond recognition in the past several decades. Australians have ready access to funds at all hours of the day, can get home loan approvals in under 24 hours, quickly and safely move money between accounts with the swipe of a finger, pay for products with the tap of a card, smartphone or watch, and have investment portfolios managed by robo-advisers.
Competition — and the innovation it fosters — has underpinned these developments. When firms have been driven to offer improved or better value financial products in order to strengthen their competitive positions, benefits have also flowed to those for whom the financial system exists — the businesses investing in the Australian economy, and the individuals whose consumption drives the majority of economic activity.
The financial system must be strong and stable. But equally, it should ensure that Australia’s businesses and households are well-served and can have confidence that ‘unquestionably strong’ institutions are not exploiting the market power that might accompany this exalted status.
This inquiry focusses on competition in Australia’s financial system as a means to improve consumer outcomes, enhance the productivity and international competitiveness of the financial system and the broader economy, and support ongoing financial system innovation — without undermining financial stability objectives.