The BGA Australia Team, led by Managing Director Michael “Mick” McNeill, wrote an update to clients on recent scrutiny of Australia’s “big four” banks.

Context

  • Australia’s House of Representatives Economics Committee recently scrutinized Australia’s “big four” banks on issues including payments surcharges, scams and cybersecurity infrastructure.
  • Surcharges have become a politically hot topic. Commonwealth Bank of Australia’s Chief Executive Matt Comyn attacked “insidious and performative populist policies” as tensions mount between politicians and corporate Australia. In addition to the review of Australia’s major banks, executives have been called to parliamentary hearings on the cost of living, airline competition, insurance premiums, government procurement and social media harms.
  • Alongside continued inflation and rising household costs, Australians continue to face significant losses to online scams. Australia’s “big four” bank executives reassured Parliament of their commitment to prevent, detect and disrupt scams. Australians lost more than AUD 2 billion (US$1.3 billion) to scams in 2023, prompting the government and businesses to rapidly adopt new protections for Australians at risk.

Significance

  • Discussion of card payment surcharges has been prominent in media following scathing comments from Labor member of Parliament and Committee member Jerome Laxale. Laxale pointed the finger at banks and global card networks, accusing them of enjoying kickbacks while costs are being pushed onto customers paying with credit cards. The Australian Banking Association rejected Laxale’s comments, noting that the costs involved in ensuring payments were made safely and securely.
  • Major lenders are prioritizing scam prevention, with the National Australia Bank Chief Executive Andrew Irvine naming online financial scams as the “plague of our times.” According to the Australian Competition and Consumer Commission, Australians reported an AUD 2.7 billion ($1.8 billion) loss from scams in 2023.

Implications

  • The Reserve Bank of Australia will consider whether surcharges should be banned as part of its upcoming retail payments review. It may release a consultation paper this year.
  • Minister for Financial Services Stephen Jones said the government intends to introduce new mandatory scam codes for banks, telecommunications companies and digital platforms, backed up by strong penalties for noncompliance. “We want Australia to be a world leader in combating scammers and our mandatory codes will put us well ahead,” he said. “Retail transactions and finance are now overwhelmingly digital … This is not a clock that we want to wind back … [but] if consumers lose trust in the rails of modern commerce, they will stop using them.”
  • The government has been working toward making crypto exchanges and digital asset platforms subject to existing Australian financial services laws and requiring platform operators to obtain an Australian Financial Services License. In addition, digital asset platforms will need to meet specific obligations that take into account the nature of the platforms. This will include minimum standards for holding tokens, standards for custody software and standards when transacting in tokens. Draft legislation has yet to be released.

We will continue to keep you updated on developments in Australia as they occur. If you have any questions or comments, please contact BGA Australia Managing Director Michael “Mick” McNeill at mmcneill@bowergroupasia.com.

Best regards,

BGA Australia Team

A small ginko leaf

Managing Director

Mick is a highly-experienced government relations expert and trusted advisor on consensus building, conflict resolution and legislative developments. He has played an integral role in helping parties achieve desired outcomes in areas of national security, health policy, foreign policy and reputational crisis management, as well as media relations, communications campaigns, immigration and human rights. Mick has two decades’ experience working with government as a media analyst, political adviser and NGO advocacy manager. After a stint serving as an adviser to an Australian senator, Mick took on the role of the locally engaged senior political specialist at the U.S. Embassy in ... Read More