Select a page

Banking News

Competition intensifying in Australia’s small business banking market

Competition intensifying in Australia’s small business banking market

(2nd December 2003 – Australia) An independent report has found that competition in Australia’s small business banking market has heated up considerably over the past two years. The report conducted by accounting giant KMPG on behalf of the Australian Bankers Association (ABA), found the number of financial services providers to the small business market had risen by 25 percent over the past two years – with some 55 institutions offering 800 products to the sector.

KPMG attributed the growth to the fact that small businesses are paying less in fees for debt finance than at any other time over the past six years. The report also noted the reduction in the number of fees such as interest rate margins and loans and overdrafts.

Another major shift has been the number of small businesses shifting to electronic banking, with 72 percent now banking online, marking a 35 percent increase from 1999-2000.

KPMG head of Financial Services, Peter Nash, said the small business banking market would continue to increase in competitiveness.

"All of the major banks have publicly stated that the small to medium sized business sector is an area of focus for them. Each has a different strategy to achieve their goal and this further differentiation should provide even more choices," he said.

Nash went on to say that regional banks were also looking to increase their share of the sector, particularly outside their home markets.

According to the report, some 12 percent of small businesses have switched financial institutions.
East & Partners's avatar

Comment on this article

 

Your comments will not be published. Required fields are marked *

 

Please enter the word you see in the image below:


Subscribe

Subscribe to our mailing list

Sign up now to keep up-to-date with the latest
market news and insights in B2B banking.

* indicates required

For more information please read our Terms and Conditions and Privacy Statements.