ABA CEO Simon Birmingham interview on Fear + Greed Podcast with Sean Aylmer

E&OE
Podcast
Fear + Greed
8 July 2026.

Topics: Household ownership of banks; Banking as critical infrastructure

Sean Aylmer: Welcome to Fear and Greed Q&A, where we ask and answer questions about business, investing, economics, politics and more. I’m Sean Aylmer. We talk plenty about the banks on this podcast. After all, the big four and Macquarie are five of the 10 largest listed companies on the ASX, and while in years gone by, bank bashing was almost a national pastime, a new report suggests it’s time to change the perception of our banks, instead viewing them as one of the country’s most important pieces of economic infrastructure, supporting everything from home ownership and small business lending through to retirement savings. Simon Birmingham is CEO of the Australian Banking Association. Simon, welcome to Fear and Greed Q&A.

Simon Birmingham: Hello, Sean, it’s great to be with you, and particularly with your listeners.

Sean Aylmer: Why do you describe banking as essential infrastructure?

Simon Birmingham: Because the banking industry is essential to essentially every part of our economy and its operations. That credit, which equals lending, doesn’t occur without a strong, profitable, viable banking industry, and that credit is essential, whether you are somebody looking to buy your first or subsequent homes, or whether you are looking to start and grow a small business, or whether you are indeed a larger corporate investor, and at all levels we see bank lending, bank credit as being absolutely essential, just of course, as is the role of banks in our payment system, which none of us ever think about. We just go and we tap our cards and double click our phones and expect everything to magically happen and happily it does, but the reality is that there is huge investment that underpins that investment that tries to minimise fraud and scams and protects your money and provides next to real time balancing of accounts across those businesses, and how you’re spending your money. And all of that goes to the productivity, life, economic growth of our economy.

Sean Aylmer: The flip side, in a sense, is that we all have to use a bank account. It’s very difficult to operate in an economy if you do not have a bank account, and personally, I think that’s a great thing. I’m wondering, the sort of the social role of banks and the infrastructure role, and the fact that I think the report says 65 per cent of people own the banks via investing or superannuation or whatnot. Do the banks just get a bad rap generally?

Simon Birmingham: Sean, you mentioned a period of fashionable bank bashing. It was also a period of real discovery of genuine problems, and as a banking industry, we shouldn’t forget that. The Royal Commission uncovered practices that needed to change, and that’s important to know, not forget, and ensure that those lessons are continually understood by those running and operating our banks today, but we also need to make sure we’re actually keeping the balance on these things right and genuine, and the reality is banks are important to our economy, as I said before, but they’re also, yes, really critical to households. What we’ve seen over the last decade or so is that Australian households have come to own more of our banks, and has grown from sort of around the mid 50 percentage range as to how much of our banks are owned by households, either directly or through their super funds, up to 65 per cent, and at the same time the value of those banks have grown, so actually the wealth of Australian households over 15 years in real terms has grown from $240 billion to $470 billion in terms of their ownership and their investment in banks, and that’s money that goes to your retirement savings, my retirement savings, and the retirement savings of many, many millions. In fact, likely most of Australians, at least through their super funds, if not directly.

Sean Aylmer: So, shifting away from investors and customers, your report says competition has saved mortgage holders up to $2,000 a year through refinancing. Is banking more competitive than Australians realise?

Simon Birmingham: Banking has really gotten much more competitive, and we’ve seen that at a range of different metrics, in terms of people swapping mortgages, 640,000 people refinanced their mortgage last year. That shows that what were perceived as the barriers that made that too hard or not worthwhile have actually changed, and people are finding it worthwhile. In fact, our analysis shows that on average some 0.35 per cent was shaved off, which can save households $2,000 in mortgage repayments per year in terms of having shaved that off, and if we look at the way banks in the finance industry measure these things, the NIM, the net interest margin has narrowed considerably over a period of time, as that competition between banks for customers has tightened. That’s good news for consumers, does demonstrate that banks are taking that competition quite seriously, and we can see that when we read the financial press about the competition, not just between the big four now, but also, of course, digital only banks, and the challenges that they are presenting in terms of other innovative business models that are well and truly being responded to by the big four, and that competition is good for customers of all of those banks.

Sean Aylmer: Okay. So, shifting on to access to banking services, because digital banking certainly allows that, but the whole debate about regional Australia, and whether a bank needs a physical presence there, whether they can do it through Australia Post, and I know in the last, only in, I think, in the last 12 months, the final big four ANZ joined with Australia Post, so you know there is that access. How responsible do banks have to provide a service in rural and regional Australia?

Simon Birmingham: I think we as an industry recognise that there is an expectation that Australians will have reasonable access to in-person support when they really need it for their banking services. For now, that is being addressed in regional Australia by the moratorium commitments that the big four gave on branch closures, but that’s a short-term response. Longer term, we are trying to work through what does in-person banking look like in a future world where customers increasingly shift onto digital platforms, where they are using those different skills, techniques, digital literacy, and knowledge to be able to access their banking in a whole range of ways, where digital only banks have been growing in their capturing of market share, and so we don’t have the firm answers to this yet, but we are very cognisant of the responsibility the industry has to ensure that in-person banking remains available to Australians who need it, that it is there in times when they need it, but we also have to find cost-effective ways that don’t harm competition between the banks or leave some banks disadvantaged relative to others in the way that is delivered.

Sean Aylmer: Banks verse technology companies. Now, the best example is Apple Pay versus Matt Comyn, the Commonwealth Bank CEO. He has had a lot to say about Apple Pay’s environment. Where does that, where do we go to from here? Because end of the day, big tech, certainly, you know, be it Apple or Google, you know, they have these payments systems, which work within, in some ways, all care no responsibility in some ways, and where do we get to with that?

Simon Birmingham: Well, I think we’ve got to think about what are the consequences of that change, and what does it potentially mean. So, the more people shift towards using an Apple Pay, for example, then a greater share of the levies that are accrued through that payments network go to Apple. Now they’re capped, they’re fixed, they don’t grow because you happen to have used your Apple phone to pay, and Apple gets extra. It comes off of essentially the bank’s bottom line, each time that is done. Woe is the banks I hear listeners say, and cry me a river around that, but the consequences are playing out in a couple of different ways. Firstly, that, of course, that means banks have less incentive to invest in that payment system, that they have less revenue coming from the payment system, and more of it is going offshore. Then there’s the relativities in terms of the contribution to our country and measure it crudely in terms of tax paid. The major banks in Australia paid $16 billion of tax. Everybody knows that the global big tech companies are pretty good at minimising the tax that gets paid in Australia and it’s just a mere fraction of that from Apple or any counterparts in that space. So, without regulatory equivalence that ensures companies like Apple playing a bigger role in the payment system face the same type of equivalence around transparency and competition and access, without that type of regulatory equivalence, we run the risk of the fact that more revenue leaks offshore, leaving our banks less capable, but also creating a revenue leakage gap for our tax system, that is then, of course, a detriment to all Australians.

Sean Aylmer: I’m going to ask you, Simon, do you miss politics? You were minister of finance, weren’t you?

Simon Birmingham: I had the great honour of being Minister for Finance, and a couple of other great portfolios too. I miss parts of it for sure. I, to be honest, I sort of say to people at present, though I wish there was more in the current political environment to give me regrets about choosing to leave, but you know, politics is being fractured right around the world, and that’s creating its challenges in many places.

Sean Aylmer: Enjoying running the ABA, your predecessor, of course, was a state politician, she was an extremely capable CEO. You’re enjoying it?

Simon Birmingham: I am relishing this role. It’s an industry that, as we’ve just touched on a few things, is issues rich, but really does give me the chance to still play in important areas of public policy, that economic impact of banks, that financial responsibility to Australians, equally areas of financial crime that are really critical and challenging for the country, be they scam prevention or dealing with anti-money laundering. There’s no shortage of issues, no shortage of regulators to engage with as well. But that ensures that somebody like me is kept busy and stimulated in the role.

Sean Aylmer: Simon, thanks for talking to Fear and Greed.

Simon Birmingham: Thanks, Sean. My pleasure.

Sean Aylmer: That was Simon Birmingham, CEO of the Australian Banking Association. I’m Sean Aylmer, and this is Fear and Greed Q&A.

Ends

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