Alternatives to Big Banks in Australia

Do you have banking super powers? For example, the power of invisibility?

If you feel like a faceless number when you walk into your bank, you wouldn't be the first. Dealing with the big banks may have its advantages, but a marked disadvantage is that few people really feel "known" when they bank at the gleaming towers of glass, also known as the big banks.

The Alternatives

Credit Unions

Credit unions are one of the more popular options for people searching for an alternative to a big bank, with an estimated 25% of Australians being a member of a credit union. Essentially credit unions are collectives where people put their money together in an effort to benefit every member within the union.

You're more likely to receive better customer service and be treated as an individual rather than just a number. In most cases, credit unions are non-profit, which means they're less likely to charge as many fees as banks.

The downside: Most credit unions charge a membership fee to cover their operating costs. And unfortunately, as most credit unions are regional, you may find it difficult to find somewhere to bank if you're travelling interstate.

Building Societies

Building Societies are similar to credit unions, although they have a stronger focus on providing loans and mortgages, rather than general banking services.

In recent years, building societies have become less popular than they once were, as many of the smaller ones were either bought out, amalgamated into other banks, or became banks in their own right, such as St.George.

Community Banks

Many of the big Australian banks reduced their banking services in some rural and outer suburban areas in the past ten years. This allowed smaller community banks to open a new business model that focused on local banking.

Perhaps the best known of these is Bendigo Bank, which began as a community bank in regional Victoria before it amalgamated with South Australia's Adelaide Bank. This has made the once-small community bank a large corporate bank that has retained some of its community banking feel with its customers.

The Benefits

There are many reasons why you might prefer an alternative to the big banks:

  • Customer Service. No matter how hard they work at it, promote it, and teach it, the fact is that big banks frequently fall short when it comes to service. Bigger often means busier, and overly busy workers tend to be less friendly, less courteous, less willing to go the extra mile.
  • Personalised Service. Remember the classic television show Cheers? The show's them song was "where everybody knows your name." There is a timeless appeal to being recognised and acknowledged by name. Think small-town. Smaller banks know their customers and treat them as friends.
  • Flexibility. If you're looking for a loan from a big bank, they look for you to meet their list of criteria. Period. If you don't meet the criteria, you're not approved. While they could choose to take other factors into consideration, in most cases they won't. After all, they don't know you, so why would they dare take a risk on you?Smaller banks, on the other hand, care about the details. They know you, and they want to help you and keep your business. So if you find yourself borderline for being approved for financing, your chances of the loans officer pushing your application through are much greater.
  • Fees and hours. Many, many years ago, in land far, far away. Banks existed to meet their customer's needs. Banks worked to keep fees low and hours long to serve you and I. But as they gained more control of more people's money, meeting our needs became less important. Thus, "bankers hours" were invented. These days, you have to schedule an afternoon off work to cash a cheque!Small banks are still trying, though. They still want to meet your needs. Your chances of finding a bank that's open on Saturdays or charges a monthly fee of only a few dollars are dramatically increased when you deal with smaller, local banks.It's easy to feel trapped by all the corporate red tape that goes on in our world. Big banks are no exception; in fact, they're sometimes the worst culprits.

If you're fed up with the big banks, or simply ready for a different – more personal – banking experience, think small. There are alternatives to the big bank status quo.

Pictures: Shutterstock

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4 Responses

  1. Default Gravatar
    MalcolmNovember 10, 2017

    Is Bendigo Bank Govet guaranteed for deposits up to $ 250 K like the big 4 ?

    • finder Customer Care
      JudithNovember 10, 2017Staff

      Hi Malcolm,

      Thanks for contacting finder, a comparison website and general information service. I hope all is well with you today.

      Yes, Bendigo Bank is included in the list of institutions wherein if it goes bankrupt, you are protected so long as your account balance doesn’t exceed $250,000.

      You may see this information on this page. Kindly scroll down until you’d see the full list of banks which have a covered guarantee or protection on account balances which don’t exceed $250,000.

      I hope this helps.


  2. Default Gravatar
    GeorginaSeptember 12, 2017

    I need to negotiate a mortgage and would like the name of a good cooperative bank

    • Default Gravatar
      LiezlSeptember 12, 2017

      Hi Georgina,

      Thanks for reaching out. I’m afraid as a comparison service and general information company, we are not in a position to recommend specific bank your lender. You may however, use our comparison table on this page to compare our refinancing options. Better still you speak to a mortgage broker who can take into consideration your current situation and find a suitable loan or lender for you.


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