Andrew Haslip, Head of Banking Content for Asia Pacific at GlobalData, a leading data and analytics company, offers his view on the state of Australia’s banking industry:
‘‘Following IOOF’s superannuation scandal, the latest wealth manager scandal in Australia, the damage to the banks reputation and to public trust in the financial services industry will have significant long-term implications for how Australians invest.
‘‘Superannuation has a prized place in the heart of many Aussies and so allegations of misuse of client money in this area are particularly damaging on top of a string of other banking and wealth-related scandals, giving the impression that the entire industry is suffering from a conflict of interest and corruption.
‘‘The clutch of neo-banks waiting in the wings in Australia will have no better time to launch recruitment drives, while a range of robo-advisors, none of which have yet broken out into the mainstream, will have the best conditions yet to draw in new money.
‘‘Incumbents need to act fast to shore up tarnished brand images. As of yet there is no indication that consumers are keen to switch. But all it will take is a sudden change in interest rates, putting attractive APRs for savings out into the market (unlikely in the short term to be sure), or a big downturn in the share market causing portfolio values to tumble (already underway by some measures), to galvanize the market.
‘‘With these trends already in play, disillusioned consumers will bite the bullet and switch to the new untested but unsullied providers.’’