The structure of the Australian banking sector is similar to that of an oligopoly, which presents the threat of minimizing competition. The structure, performance and behavior of banks are important because they ensure that they operate competitively. However, in Australia the market is dominated by four major banks which threaten competition. The structure of the Australian banking sector is quite oligopolistic, which diminishes the obvious competition in the market. The performance of dominant banks has shown an increase in profitability and return on assets compared to international banks in a freer market. Despite minimal competition, industry conduct has declined slightly with increased fees and investigations into possible collusion. The structure, performance and driving paradigm of the Australian banking sector threatens evident competition in the market. Within an industry with a highly concentrated structure, the conduct of the parties involved tends to initiate anti-competitive behavior, which improves company performance. Competition can be measured within an industry using various methods, the first is the concentration rate which is the percentage of market share held by the largest companies in an industry (Young, P 2014). The second measurement tool is the Herfindahl-Hirschman Index (HHI), which calculates the percentage of market share held by all companies in an industry by calculating the square root of market share (Bikker, J & Haaf, K 2002). Banking structure can also be determined by market segmentation, product differentiation, barriers and diversification. Of the 54 banks in Australia's banking sector, the market is dominated by just four, which occupy 76 percent...... middle of paper ...... depriving smaller, less prominent companies the opportunity to compete fairly in the banking sector. The Australian banking sector is quite oligopolistic, which has minimized the threat of competition from small businesses. The structure of the sector's four dominant banks has been marked by the introduction of anti-competitive behavior targeting small businesses. In turn, bank performance has translated into higher profits and returns on assets, pushing Australia to have four of the eight most profitable banks in the world. Banks' performance has seen their behavior become less competitive with the introduction of multiple fees and charges for consumers, due to uncompetitive markets. Therefore, the Australian banking sector has four very dominant companies with fine control, limiting competition in the market..