Suntrust bank says it is ‘very concerned’ about Australia’s financial services industry
The National Australia Bank has urged Australians to be cautious about the growth of online banking services, with chief executive officer Scott Hamer describing it as a threat to Australia’s banks.
Key points:Suntrust says the online banking industry is “a very disruptive, disruptive force”The bank said it was “very concerned” about Australia becoming an offshore bankIn a letter to customers, Suntrust said it would stop working with the Australian Government until the new online banking rules are implemented, and said it is “extremely concerned” by the growth in services that rely on the use of offshore financial services providers.
The letter was sent to customers in a targeted letter, including small businesses, people with disabilities and the elderly.
The bank’s head of financial services, Ben Jettis, said the bank is concerned about the impact of online payment providers and their customers.
“The current growth in online banking will result in a significant increase in the amount of money being held overseas,” Mr Jetti wrote.
“We have already seen this with the introduction of the ‘cashback’ program, where some consumers may be charged a percentage of the total amount they make online when they return to Australia.”
These fees will ultimately be passed on to customers.
“We believe that this is a threat for the financial services industries in Australia.”
The bank is calling for Australia’s new online financial services rules to be fully implemented before the end of this year, and has urged customers to take extra steps to protect themselves from these “disruptive forces”.
“We would encourage Australians to consider whether they want to continue to transact with their bank, credit union, or other financial institution on a secure, digital platform,” Mr Hamer wrote.
“This includes not having your online banking information or personal information shared with third parties, or having your personal information or account details shared with any third parties for any purpose other than providing an online service.”
“While we recognise that online banking is not yet available in every state, we would encourage you to contact your local banking authority and discuss your concerns and if you believe that there is an appropriate timeframe for online banking to be available, please contact us at [email protected].”
The new rules were announced last month, after the Government announced it would introduce the Australian Transaction Processing Standards (ATPS) regime.
The ATPS will require financial institutions to comply with the requirements of the Financial Services Modernisation Act (FSMA), including requirements to:Provide a means of electronic payment and remittance to customers using an online platform that is compliant with the FTAs Financial Institutions Act and Australian Taxation Office rules and regulations.