Banking in Australia is undergoing one of its most dramatic overhauls in decades, with amalgamations and mergers reshaping the financial services landscape in 2025. From credit unions joining forces to superannuation funds consolidating, these moves are not just headlines—they’re influencing everyday Australians’ access to products, services, and competitive rates. Whether you’re a member of a regional credit union or a customer at one of the big four banks, understanding the drivers, impacts, and opportunities of amalgamation is vital for making smarter financial decisions this year.
Why 2025 Is the Year of Amalgamation
Australia’s financial sector is no stranger to consolidation, but 2025 has witnessed a sharp uptick. Several factors are driving this trend:
- Regulatory Pressure: The Australian Prudential Regulation Authority (APRA) has tightened capital and risk requirements for smaller entities, making it harder for smaller banks and credit unions to compete independently.
- Economic Headwinds: Persistently high inflation and cost-of-living pressures have increased operating costs, prompting institutions to seek scale and efficiency.
- Technology Investment: Digital banking expectations require massive IT upgrades. Smaller players are merging to share the cost and expertise needed for these investments.
For example, in early 2025, Heritage Bank and People’s Choice Credit Union completed their long-discussed amalgamation, creating Australia’s largest customer-owned bank. Meanwhile, several regional credit unions have banded together to form new entities capable of offering digital-first banking to compete with neobanks and fintechs.
What Amalgamation Means for Customers
While amalgamation often promises greater stability and product choice, it can be a double-edged sword for customers. Here’s what to look out for:
- More Comprehensive Products: Larger, amalgamated entities can often provide a broader range of accounts, loans, and investment options. The 2025 merger wave has seen new bundled packages, improved digital banking apps, and expanded regional branch networks.
- Potential for Lower Fees: Economies of scale can mean lower transaction fees and better interest rates, as seen in the recent merger between two major industry super funds, which immediately slashed admin fees for members.
- Reduced Local Presence: On the flip side, amalgamation sometimes leads to branch closures, particularly in rural and regional areas. This has sparked debate, especially after several merged credit unions announced plans to consolidate overlapping locations in NSW and Queensland.
- Service Experience Changes: New systems and customer service teams can mean a transition period. Some customers have reported teething issues with digital platforms post-merger, though most institutions are investing heavily in support and transition teams.
Policy Updates and Regulatory Trends
The Federal Government and regulators are keeping a close eye on this amalgamation trend. Recent policy shifts include:
- APRA’s Enhanced Oversight: From March 2025, APRA introduced stricter due diligence requirements for mergers, requiring detailed member impact assessments and transition plans to minimise disruption.
- Competition Watch: The Australian Competition and Consumer Commission (ACCC) is actively reviewing larger deals to ensure consumers don’t lose out on competition. In April 2025, the ACCC blocked a proposed merger between two major regional banks, citing concerns about reduced lending competition for small businesses.
- Super Fund Consolidation: The Australian Securities and Investments Commission (ASIC) has encouraged superannuation fund amalgamations to drive down fees and improve member returns, with new guidelines on transparency and member communication during the process.
These policy updates mean greater scrutiny on how amalgamations affect consumers, with a focus on transparency, continuity of service, and maintaining a competitive market.
Looking Ahead: Opportunities and Risks
As amalgamation shapes the sector, what should Australian consumers and businesses keep in mind?
- Stay Informed: If your financial institution is involved in a merger, watch for updates about changes to products, fees, and access. Most amalgamations require a member vote and provide regular communications.
- Review Your Accounts: Take the opportunity to compare your merged institution’s offerings with others on the market. Amalgamation may mean better deals—or it might be time to switch if your needs aren’t being met.
- Watch for Innovation: Merged entities often launch new features—think improved mobile apps, instant payments, or sustainability-linked products—aimed at winning over both existing and new customers.
2025’s amalgamation wave is more than just a reshuffling of the financial deck. It’s an opportunity for Australians to benefit from improved services, but it also requires vigilance to ensure your financial needs are still being met in a rapidly changing landscape.
