In a pre-emptive strike ahead of the Reserve Bank of Australia decision tomorrow on whether to make a third successive cut to the official cash rate, Mr Swan warned banks it was now easier than ever for dissatisfied customers to take their business elsewhere.

He said the banks were saying they should have a right to maintain huge profitability forever, irrespective of market conditions.

The official cash rate now stands at 4.25 per cent, with market analysts almost universally tipping a 25 basis point cut to four per cent tomorrow.

The banks have been strongly criticised for not passing on all of past rate cuts to their customers.

Mr Swan said bank net interest margins were back where they were before the global financial crisis and return on equity was unlike that of just about any of their peers elsewhere in the world.

``But the banks are making it very clear that they're prepared, perhaps, to do a range of things, to keep that huge profitability in place,'' he said.

``Their customers will be very angry if they don't pass (rate cuts) through in full. I say to their customers have a look around, you've got a greater capacity to shop around now than you've ever had before.''

Mr Swan released Treasury data showing banking sector reforms, including bans on mortgage exit fees, was encouraging more and more people to take their business elsewhere.

In the five months since the reforms were implemented, 320,000 households had taken out no exit fee loans. From July 1, customers will be able to switch deposit accounts with the stroke of a pen.

``Lenders now have to win the loyalty of their customers with good service and competitive lending rates. Banks can no longer assume that once a customer signs on the dotted line, they'll stick with them,'' Mr Swan said.

Opposition treasury spokesman Joe Hockey disputed Mr Swan's claim that families were paying less in interest than they were under the coalition.

``On average, effective interest rates paid by home buyers and small businesses were lower under the coalition from 1996-2007 than they have been under Labor since the 2007 election,'' he said.