The Australian Government's decision to adopt virtually all of the proposals of the Wallis inquiry into the country's banking sector is great news for weary bank customers, many heartily fed up with paying ever increasing fees and transaction charges simply to get their hands on their own money. Rather less happy about the new deal however are Australia's biggest banks - National Australia Bank, Westpac, Commonwealth and ANZ - with the stage now set for any number of non-bank players to set up shop and offer the kinds of services previously the exclusive realm of banks. Analysts say that the changes - which open up the deposit, lending and even payments systems to outsiders - mean that telecommunications companies, computer software firms and even supermarkets now will be allowed to offer banking services in a shake-up which echoes the dramatic changes already being experienced in Britain. John Buttle, chairman of the banking and finance group of management consultant KPMG, said: 'They are going to come from all over the place - you are talking about anyone from Woolworths, Telstra, Microsoft, GE Capital; anyone that has a big customer base and wants to expand the sorts of products they offer and get their hooks deeper into customers.' Aussie Home Loans, the no-frills mortgage provider which already is a thorn in the side of the big banks in the home-loans market, says it is considering offering deposits and other products. The target of the reforms is to develop Australia into a leading financial centre in the Asia-Pacific region, to put the country in a position to compete in the global arena. The Business Council of Australia said: 'Ensuring that Australia has a modern and efficient financial system is fundamental to Australia's competitive performance. The government decision is a major advancement.' Just in case anyone is in any doubt which side the government is on, Treasurer Peter Costello has urged consumers to shop around for cheaper banking services, and take their business elsewhere if they are not happy with what they are being offered by their existing bank. Unveiling his endorsement of the Wallis recommendations, he said: 'What this does is, it means that if banks are charging fees that are too high, you don't have to go to a bank any more. 'Under a regulatory system like this, you can get bank-like services from non-bank institutions.' He also warned the banks: 'If we see any evidence whatsoever of anti-competitive or uncompetitive pricing then the full weight of competition law will be brought to bear.' For now at least, the banks themselves are putting on a brave face. The Commonwealth Bank, Australia's largest bank, said it 'welcomed the opportunity to compete enthusiastically' in the light of the government's decision to endorse the recommendations, while life assurer National Mutual commended the government for its enlightened approach, saying: 'This will place the industry in the right position to be internationally competitive in the future.' Below the surface, however, Australia's big four are not a happy bunch. Westpac warned this week that many of the reforms were inherently risky, while National Australia Bank criticised the government for its failure to allow mergers among the big four banks, saying: 'We believe there are indications that the general public are beginning to understand there are potential benefits for Australia from such mergers. 'We also believe the government will also understand this in the future.' Peter Leo de Rytsis, banking analyst at BZW, explained: 'The changes are pro-consumer and negative for the banks because they are eroding the traditional barriers to entry to their markets. The changes will mean easier access by other financial institutions to the payments system, easier access to the deposit system and it will provide customers with greater choice.' Jeff Emmanuel, banking analyst at James Capel, said: 'The government has certainly delivered on most of the recommendations the Wallis report had proposed. It does introduce layers of change for the industry. 'It means that the deposit side of the banking industry will come under increasing competitive pressure, more so in the longer term. It will offer consumer more choice. 'What we have seen happening on the home-lending side is open to be repeated on the deposit side.' However, it is not all bad news for the banks. Mr Leo de Rytsis said that despite the extra competition, the big four still had an ace up their sleeve in the form of well-known and trusted brand names. He said: 'Customers are traditionally very wary of placing their money with someone new and so many will choose to stay with a name they know.' When compared with a supermarket offering a combined banking and shopping service at half the price, however, the banks may find they are in for a rough ride.