12 February 2018
Station: CHANNEL 9
Time: 07:06 AM
Compere: GEORGIE GARDNER
Item: INTERVIEW WITH ANNA BLIGH, CEO, AUSTRALIAN BANKERS ASSOCIATION, ABOUT THE DRAFT LEGISLATION PROPOSING THAT THE BANKS MAKE MORE INVESTMENT IN TECHNOLOGY TO ALLOW CUSTOMERS WITH GOOD CREDIT GET LOANS AT A CHEAPER RATE.
Interviewee: ANNA BLIGH, CEO, AUSTRALIAN BANKERS ASSOCIATION
GEORGIE GARDNER: There's hope of cheaper loans for millions of loyal bank customers this morning, with draft legislation putting pressure on the big four. For more on this, Anna Bligh, the CEO of the Australian Bankers Association, joins us. Anna good morning to you.
ANNA BLIGH: Good morning, Georgie.
GEORGIE GARDNER: So customers with good credit histories will get rewarded. It's about time, isn't it?
ANNA BLIGH: Well, up until 2014, you could only get negative credit history about someone. If someone had failed to make a payment or had been declared bankrupt. What this now allows is for the whole credit picture where you have been a good payer, where you've- but it also allows banks to identify how many credit cards you've got, how many loans you've got, and make a much better assessment about whether you are a good or a bad credit risk. So what it means is that banks can make much more responsible lending decisions with the full picture. What it for some customers is that their full credit history may not be as good as they would have been otherwise been able to present and they may find it harder to get a loan. But for those customers that have been good payers, who have reasonable levels of debt, this will allow them potentially to not only get credit where they might not have otherwise, but to get it at a cheaper rate. And that's great news for customers.
GEORGIE GARDNER: So with this greater transparency, what sort of percentage do you think of people that are in the running for a cheaper loan?
ANNA BLIGH: Well look, I think it's hard to make a judgement about that until banks have seen all the data, but I should say that some consumer advocate groups are worried that it might mean it's harder for some people to get loans than it would have otherwise been. But there's no doubt it could lead to the situation where banks can offer a cheaper rate for the credit or the loan to someone who has a much, much better credit rating history than they might have otherwise been able to see when it was just where things went
GEORGIE GARDNER: [Audio skip] what is this going to mean for the bottom line for the banks?
ANNA BLIGH: Well, this will mean for banks that they'll be having to make more investment into their technology systems to enable this to happen. But that's the cost of doing business in a very innovative banking system. I don't know that Australians realise that we have one of the most innovative and technologically advanced banking systems in the world; 24-hour banking, payWave. All those things we take for granted simply don't happen in many other systems. I think anyone who travels will know that payWave is certainly just not a reality in many countries that you'd expect to see it in. So yes, it will cost the banks, but that's part of their investment in better customer outcomes, and I think that there'll be more to come in innovation in banking this year.
GEORGIE GARDNER: Alright. Always good to see you, Anna Bligh. Thank you very much.
ANNA BLIGH: Thank you.
Access to credit opens up opportunities and fulfills aspirations. Getting it right requires the right balance between consumer protections and the flow of credit.
Interviewed by AM’s Peter Ryan, ABA CEO Anna Bligh talked about the substantial drop in loan deferrals since their peak during the pandemic, falling from 900,000 to 300,000.