SCHOOL OF Western Sydney University

ASSIGNMENT COVER SHEET

STUDENT DETAILS

Student name: HA BAO KHANH Student ID number: 22083974

UNIT AND TUTORIAL DETAILS

Unit name: Financial Institutions and Markets Unit number: FIM-T323WSB-1

Tutorial group: Tutorial day and time:
Lecturer or Tutor name: Dr. Pham Quoc Hung

ASSIGNMENT DETAILS

Title: Banking system : A comparative analysis of Australia and Germany

Length: 524 words Due date: 26/11/2023 Date submitted: 26/11/2023
Home campus (where you are enrolled): VIETNAM

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signature: HA BAO KHANH
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not been signed.

ARO 00380 08/15

 FINAL ESSAY

Banking system : A comparative analysis of Australia and Germany

By : Ha Bao Khanh

FIM-T323WSB-1
Banking system : A comparative analysis of Australia and Germany

Banks are one of the most crucial links in the financial system which help the economy
grow, by allocating the resources from household to funding among firms. Still, each country will
have its own way of functioning the banking system. For example, the United States and the United
Kingdom are dominated by financial institutions. Whereas in Australia or Germany, banks still
play a traditional role. This paper aims to explore the statistical similarities and
differences between the banking systems of Australia and Germany, by explaining the definitions
and providing some factors which make two country’s financial systems stand out.

The two countries share some common and differences in the dominant model. The
Australian banking system is strong, with the evidence through its several features which have
played a crucial role in supporting the economies activities during the economic crisis. The
banking system is a mix of tradition banks and competitive financial markets.Banking in Australia
is controlled by four major bank: CommonWealth bank, Westpac, ANZ, and National Australia
bank .With the total assets of 1,451 billions dollars, those four are significant, who provided a wide
variety of economic services ( fund management and insurance ), according to the reverse bank of
Australia. Meanwhile, competitive financial markets like Credit Union or Building societies, with
the total assets of 52 billions dollars, provided resources by rasing funds and personal house loans.
Although cooperation via capital markets seems to be promising, Germany is considered bank-
centered by the country's so-called “three- pillar” banking system. The private bank sector, well
known for Deutsche Bank and Commerzbank, play a significant role by controlling almost 30%
of the market (privacy shield, n.d).

Australia's regulatory environment focuses on stability, competition, and consumer

protection. The Australian Prudential Regulation Authority (APRA) and the Securities and
Investment Commission (ASIC), are the main supervisor-regulator, in charge of overseeing and
making regulatory bodies. As a member of the European Union, the task of Germany's banking
system is monitored by the Bundesbank and Federal Financial Supervisory Authority (BaFin),
following the framework of the European Union banking regulation.

Innovation and Technology Adoption is one of the most interesting topic in comparing the
two countries' differences. In 2023, 98.9% of customers transactions were via apps or online, with

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Banking system : A comparative analysis of Australia and Germany

only 13% of cash being used for payment (Martin, 2023) Quick adoption of technology has led to
an enormous shift toward digital banking. Many fintech startups have shown prominence. The
process seems to be slower in Germany. With 48.74% of online banking, there is evidence in
digitalization, but the traditional banks are still prominent.

Vietnam can learn from a comprehensive examination of both countries in the differences
in innovation and technology adoption. Vietnam has planned a balanced approach in banking that
traditional banks go along with modern innovation. A great example could be Vpbank with their
digital bank, Cake by Vpbank, which has drawn over one millions customers.

In conclusion, this paper offers more than just a comparative analysis, it shows a clear path
for nations to reach a resilient and adaptive financial system. Vietnam, if practices the lesson
learned, has a huge opportunity to make the banking sector into the digital era.

___ THE END ___

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Banking system : A comparative analysis of Australia and Germany

REFERENCES

Australia, S. C. B. O. (2023, March 9). The structure of the Australian Financial System |
Financial Stability Review – March 2006. Reserve Bank of Australia.
https://www.rba.gov.au/publications/fsr/2006/mar/struct-aus-fin-sys.html#appendix
Germany - Banking Systems | Privacy Shield. (n.d.).
https://www.privacyshield.gov/ps/article?id=Germany-Banking-Systems

Who regulates banking and financial services in your jurisdiction? | Germany | Global
Financial Services Regulatory Guide | Baker McKenzie Resource Hub. (n.d.).
https://resourcehub.bakermckenzie.com/bg-bg/resources/global-financial-services-
regulatory-guide/europe-middle-east-and-africa/germany/topics/who-regulates-banking-
and-financial-services-in-your-jurisdiction

Martin, M. (2023, June 7). 98.9% of bank transactions now digital – report.
https://www.brokernews.com.au/news/breaking-news/98-9-of-bank-transactions-now-
digital--report-282624.aspx