One of the things that works in banks' favour is how difficult it is to switch banks and the unwillingness of most customers to go to the trouble.

To change banks you have to let your pay office know where to deposit you wages, you have to remember where your direct debit payments are going and change all of them, and you have to give new credit card details to anyone who bills you in this way.

And if you're a mortgage customer, there's even more work, renegotiating another loan with another bank.

All in all there's a huge number of online and paper forms to fill out and most of us just can't be bothered.


It's great news for the banks because it means we are very sticky customers. The banks put a lot of effort into winning new customers, but less effort into holding on to existing ones.

They know they really have to infuriate a customer before they are prompted to move.

They can charge you a bit more on your mortgage or hit you with higher credit-card rates, safe in the knowledge that you won't go anywhere.

But this could change following a concession from ANZ chief executive Shayne Elliott that the bank would support a new regime to allow bank-account portability. In essence, the scheme would allow consumers to change banks, but keep the same account number, hugely cutting down on the amount of hassle this would cause.

He also committed to supporting an "open data" regime. This would allow customers to expose their own data such as transaction history to other banks, who could analyse it and see if they could potentially offer a better deal.

Small finance start-ups believe this will also make it easier for them to attract customers from the big banks.

Taken together, such changes would significantly boost competition between the banks and make them work harder for your custom.

ANZ's support of the change was quickly seized upon by Australian Prime Minister Malcolm Turnbull, so it could soon become a reality, to the benefit of us all.


If it does happen, it might just be the one concrete outcome from last week's grilling of the bank chiefs by Australia's Parliament, which is where Elliott made the concession.

For 12 hours last week the chief executives of ANZ, the Commonwealth Bank, Westpac and the National Australia Bank were questioned by members of a parliamentary committee.

The inquiry was a result of the bank chiefs and the Australian Government trying to head off a Royal Commission into banks, which has a lot of popular support thanks to a campaign by the opposition.

The banks want to avoid a Royal Commission that could lead who knows where and make findings and recommendations that could crimp their profits.

Hence the CEOs showed up in Canberra last week and politely answered questions from backbench MPs on both sides of the house hoping to make a name for themselves.

The bank chiefs made a few concessions - maybe credit card fees could be lower and, yes, some of their financial planners did let down customers - but none of the MPs landed the sort of killer blow that would have propelled them to the front page.

The bank CEO used to opportunity of the inquiry to warn against the introduction of new regulations that could weaken the sector in a way that would reduce the ability of the
Australian economy to withstand a future economic shock.

This is no small risk. By one count there have been 10 major inquiries into the banking sector in recent years, into issues including small-business finance, banking competition, credit card interest rates, ethical standards and financial advice just to name a few.

The inquiries themselves may be no bad thing - the more scrutiny the banks are put under the better - but the risk is that they lead to knee-jerk and populist regulation. The point of any regulation should be to protect consumers and ensure the strength of the banking system, not to punish the banks because we don't like them.

Commonwealth Bank chief Ian Narev warned the inquiry against regulating the industry's profitability, saying it was crucial for banks to be able to manage returns through a full business cycle, allowing strong profits to create resilience against economic shocks.

"It's very dangerous for anyone to take a view that when things are going reasonably well, people should then start to regulate profitability, because I don't want to be sitting here in a number of years' time when cycles inevitably turn, wondering why banks are struggling because of regulation that was put in place when things were better," he said.

We may not like our banks very much and they might not always be model corporate citizens, but the fact is we need them and we need them to be strong.