Australia’s major banks take financial hit as market intensifies
Australia’s major banks have had a tough year relative to the overall banking sector, with a substantial decline in cash profits and a falling share of the mortgage market, according to a new KPMG report. The firm attributes the declines to a combination of regulatory and international pressure.
The four major banks – Commonwealth Bank of Australia (CBA), Westpac Banking Corporation (WBC), Australia & New Zealand Banking Group (ANZ) and National Australia Bank (NAB) – dominate the country’s banking sector, drawing the lion’s share of clients and revenues.
Known as the Big Four, the banks are so large and important to the economy that they consistently rank are among Australia’s most valuable brands. However, much like the banking sector across the globe, these banks have come under pressure from various directions recently, including regulators, society, and rivals such as BigTechs and FinTechs.
The continued growth of what KPMG terms the ‘regulatory and compliance burden’ is one factor driving up costs for banks. Areas of regulatory pressure include a tightening of data management standards across the globe, rules for know your customer and anti-money laundering, and responsible lending, among others.
Disruption from a growing financial technology (FinTech) market is also having a strong impact on major banks, forcing them to ramp up their investment in technology to tackle competition from smaller, more tech-savvy and agile players.
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