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Jessica Darnbrough
The government’s fifth pillar concept has been an abject failure, FirstMac owner Kim Cannon has claimed.
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Speaking to The Adviser, Mr Cannon said credit unions were not able to compete with the banks on price, product or accessibility.
“I prefer to refer to the fifth pillar as the fifth pillow,” he said.
“You have heard people refer to Fiji time, where everyone in the country travels to the beat of their own drum. The same can be said for credit unions. They are not challenging the big banks in any way.”
Mr Cannon said it was up to the non-banks to inject much needed competition back into the mortgage lending space, however, he admitted that the task is not one that can be completed easily.
“The capital markets are effectively closed at the moment,” he said.
“For the non-banks, such as FirstMac, that need to source their funds from overseas, finding affordable funding is not easy. We are being priced out of the market.
“Moving forward, the key for us is just to hang in there. We are currently putting in place a range of strategies that will help us in the future.”
Mr Cannon said those strategies included a new range of products and technological platforms.
“We can’t compete right now. Instead, we will use our time preparing for tomorrow.
“We might never see our market share return to the 20 per cent plus we enjoyed some years ago, but what we can do is ensure we keep the banks honest and keep competition in the mortgage lending space alive.”
