They skimp on rate cuts, frequently offer less competitive rates on deposits and loans, and are being sued for billions of dollars in fees they allegedly wrongfully charged to customers.
Yet the big four banks are still beating their smaller rivals in the battle for customers. What is behind the mismatch?
"I think the smaller banks are being outmarketed by the big banks," said Rohan Gamble, managing director of financial comparison site Mozo.com.au. "The big banks have a competitive advantage through scale, and I think that's the effect that plays out over and over again."
The advantage is on full display from data on household deposits. The market shares for such deposits were flat or lower at mid-tier Suncorp and Bank of Queensland in the May-July period compared with August, while they are down slightly for banks in the "other category", according to data compiled by Commonwealth Bank equities research.
Only Bendigo Bank saw household deposits firmed slightly in the same period, between 3 and 4 per cent.
Mr Gamble said smaller players often had competitive products but they did not have the breadth of marketing, the branch networks, or the same advertising firepower to win new customers.
"So in the long run the [big] banks are still winning the overall equation," he said.
On the deposit side, smaller banks are highly competitive. To take one example, the average online saver base rate among the big four is 3.2 per cent, excluding promotional rates, according to data from Canstar. The equivalent rate averaged from Bank of Queensland, Bankmecu, ME Bank and Credit Union Australia was 3.85 per cent.
The average 12-month term deposit from a big four bank yields 4.36 per cent, according to Mozo, while the average from mid-tier banks is 4.65 per cent.
Despite the heightened competition from the smaller banks, the GFC has strengthened the hand of the big four, allowing Westpac to snap up St George Bank, and Commonwealth Bank to buy Bankwest.
Mr Gamble said big banks gobbled up the second-tier rivals, which enhanced their advantage of scale and "made it very difficult for the next brand of challenger to come through".
It took three days after the Reserve Bank lowered the official cost of credit for National Australia Bank and Commonwealth Bank to pass along only 20-basis point in reductions in their standard variable rates Friday. Westpac cut only 18 basis points.
Even with the major banks, as of today, passing on an average of 110 basis points since the RBA began its 150-basis point rate-cutting cycle last November, the smaller players have struggled to peel off the big four's customers.
Smaller market share
Market share among the smaller institutions has actually deteriorated since the global financial crisis hit.
The share of mortgages owned by the big four lifted from 74 per cent of the total in September 2008 to 80 per cent last month, Australian Prudential Regulation Authority figures analysed by financial comparison site RateCity show.
KPMG partner in financial services Martin McGrath said smaller banks and institutions face higher funding costs but are trying to compete.
As well as the higher funding costs, they face a challenge in that "people are loath to move", he said.
"It's still perceived to be hard to change banks," Mr McGrath said. "There's a bit of apathy from people."
Yet the case for an exodus away from the major banks is alive and well in the current market.
In addition to the foot-dragging on rate cuts, the largest class-action suit in Australian legal history centres on an estimated $5 billion in alleged penalty fees slapped on consumers by banks in the six years to 2010.
Despite the frequent bouts of public outrage for the big four, which have earned barbs from the public and a regular tongue-lashing from Canberra, the big banks' market share of household deposits drifted up in August, according to the CBA equities data.
ANZ and NAB hold about 15 per cent of the market for household deposits and Westpac notched up a slight gain to about 22.5 per cent of the market. CBA was down ever so slightly to just under 30 per cent.
Total lending was a similar story, with ANZ, CBA and NAB notching up slight improvements in August, over the three-month period ending in July, with all the major banks holding between 15 and 25 per cent of the market share.
For Suncorp, Bendigo Bank and Bank of Queensland, the growth was flat, at levels between 2 and 3 per cent, the CBA equities data showed.
'Huge brand loyalty'
RateCity spokeswoman Michelle Hutchinson said consumers were in some way to blame for the situation as they demonstrated "huge brand loyalty" for their banks and were sceptical about new brands.
"There is [also] a myth that many people believe they will get a better deal if they have been with the same financial institution for a long time or if they have many products with the one bank," she said.
But analysis of product pricing showed that wasn't always true.
A ban on mortgage exit fees came into effect on June 1, 2012 with the aim of making it easier for customers to switch their accounts to increase competition between banks.
Although loans for refinancing have grown 17 per cent in the year to June to $7.3 billion, borrowing to buy existing property fell by almost $1 billion, suggesting that the switching reforms have had little impact on the broader housing market so far.