Due to the Great Depression, more banking regulations were adopted which made it difficult for foreign banks to establish themselves in the country. Less banks were involved in the sector, and these banks were classified as either state-owned savings banks, or commercial trading banks. This left a gap in the market for building societies and credit unions to fill and thrive. From the mid-1960s onwards, deregulation of the country’s financial sector meant that savings and trading banks no longer had to be distinct in their functions and separate from each other. Interest rates could be set by banks themselves and building societies could take deposits from the public.
Bank acquisitions throughout the 70s and 80s led to fewer larger banks dominating the market. Due to growing concern and political pressure regarding the shrinking number of large banks operating in the market, the Australian government adopted the ‘’four pillars policy’’ in 1990. The policy was implemented to stop further mergers between the big four banks in the country. Today, the big four banks include ANZ Bank, Commonwealth Bank, National Australia Bank, and Wetspac.
The future of banking in Australia is set to drastically change over the coming decade. While technology will likely lead these changes, demographic, socio-economic, and regulation factors will also play a large role in shaping the banking industry across the country. The internet of things, cloud computing, artificial intelligence, and 5G are just a few of the technological capabilities that are predicted to impact the banking sector.