Will banks continue to be central to the economy
Rhys Roberts, Managing Director of Roberts Gray Lawyers today called for national planning the future of banks and associated legal issues
“While much of the media coverage regarding the Banking Royal Commission constitutes political point scoring, the most critical issue is to learn from the Commission findings to review the role of the banking sector within a rapidly changing global market ,” said Mr Roberts.
“The traditional role of banks has been substantially as financial intermediaries and there is increasing evidence that this role is becoming less relevant for both depositors and borrowers.”
“There is a clear trend in the market. Borrowers and lenders are meeting directly, or via new avenues, and bypassing the bank intermediation role,” Mr Roberts said.
“This has resulted in banks seeking new revenue streams and seeking a share of other areas of business, such as superannuation, where they may not be efficient suppliers.”
“Banks are seeking to protect profitability by entering areas where they are not well equipped and where there are internal inducements to make decisions and take actions that boost profits.”
“This not good for the economy, creates market distortions and erodes public confidence,” said Mr Roberts.
“There are significant market changes that create doubts about the future of the banking industry and the defensive and unethical actions by banks being unearthed by the Banking Royal Commission are indicators of a poor response to those changes.”
“The state of the global economy, Australia’s changing demographics, shifts in consumer behaviour, changing ties with Asia and the influence of technology on all aspects of life must be considered in broad planning for the future of the banking industry.”
“The Banking Royal Commission should be seen as more than some sort of trial. It must inform national forward planning that addresses government priorities, the evolving economy and changing consumer expectations,” said Mr Roberts
Managing Director, Senior Partner
Roberts Gray Lawyers
Phone: + 61 3 9642 2666