Aussies 'don't recognise benefits of mutuals'

Monday 05 November 2012

Article by Mozo

Many Aussies do not recognise the benefits of co-operatives or mutuals, despite the fact 13.5 million people are already members of such organisations.

A study recently published by The Australia Institute showed that while eight out of ten citizens belong to a co-op, only 16 per cent realise it.

Executive director of the body Dr Richard Denniss said there are "enormous benefits" for customers who switch their home loans to a mutually-owned group.

The report showed that people can save $76,417 over the life of an average mortgage and reduce their payment period by three years if they switched from a "big four" bank.

"Millions of Australians could spend less on their mortgages, spend more in retirement and save a small fortune when they need to go to the doctor, buy a book or buy some wine," Mr Denniss remarked.

"At a time when many people are talking about the rising cost of living it is surprising that more Australians don't switch to a member-owned alternative."

Treasurer Wayne Swan recently labelled mutuals and co-ops as the "fifth pillar" of Australian banking and it seems that people who do leave the major lenders do not regret their decision.

Roy Morgan Research recently revealed that although Aussies are happier with the services offered by the country's biggest banks, smaller lenders still lead the way in the customer satisfaction stakes.

The study found that 84.1 per cent of people were content with their mutual and co-op bank, compared with 77.3 per cent of big four customers.

Victoria Teachers Mutual Bank was a star performer, with an impressive satisfaction score of 95.5 per cent, while Bankmercu achieved a rating of 93.7 per cent.

A lot of people were annoyed that Australia's main lenders did not pass on the Reserve Bank of Australia's 25-point interest rate cut last month.

The central bank's board members are due to meet again this week and it will be interesting to see if further rate reductions are forthcoming and even more intriguing to see what action the big four banks will take.

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Aussies 'don't recognise benefits of mutuals'

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