Half of Australians would switch banks for better interest rates – New research from Backbase
26 April 2023
- Backbase, the global
leader in Engagement
released a new report titled, “Banking
Disruption: Australians’ Shift in Focus towards Credit Unions,
Mutuals and Second Tier Banks”,
which highlights the ways Australians are engaging with the top 10
banks online and via mobile apps, and their expectations of banks and
digital banking amid the rising cost of living.
report analyses findings of a survey, conducted by PureProfile and
commissioned by Backbase, of 1,003 customers of the top 10 banks in
are competing on interest rates and customer experience
more than half (54%) of consumers being confident their primary bank
of choice is pricing its products and services, including interest
rates, fairly, half (50%) claimed they would switch their primary
bank for better interest rates. Other highly rated reasons for
switching banks related to the overall customer experience, including
the number of branches and ATMs available (18%), limited features in
internet banking and/or the mobile banking app (14%), slow internet
banking and/or mobile banking app (13%), needing to log into multiple
sites to access different products within the bank (12%), unappealing
user interface and navigation (11%), and outdated banking products
that no longer suit their lifestyle (13%).
one in five (19%) consumers claimed to be considering switching out
from their primary bank, with 3% moving to a second tier bank, 3%
moving to a digital bank, 2% moving to a big four bank, and 10%
planning to switch but not having chosen a bank yet.
almost three-quarters (72%) of customers believe banks should
consider changing their products, services, and the customer
experience they deliver due to the rising cost of living.
Ghodosi, Managing Director of Backbase Australia, commented, “The
banking sector has an opportunity to engage with customers as they
are weighing up their financial service provider options amid various
economic shifts and financial pressures. Beyond interest rates,
Australians are also looking for a helpful and smooth digital
experience when managing their finances. Of those looking to change
banks, almost half would switch based on factors related to the
customer experience, and this is where effective investment by banks
could pay significant dividends.”
of banks and digital banking experiences are evolving
Over a third of respondents (35%) believe their bank or the whole banking industry has the most responsibility to alleviate consumers’ financial pressures among rising interest rates. Over a quarter (26%) placed responsibility with the Federal Government, and a quarter pointed to the Reserve Bank of Australia (RBA).
This mindset is taking place
alongside an ongoing shift to digital banking. Over one third (35%)
of consumers have not visited their bank’s physical branch in the
last six months, and more than half (59%) have not called their
bank’s call centre in the last six months. More than half log into
their mobile banking app or internet banking account at least once a
day, with a quarter (24%) citing financial insights in their banking
app being their favourite feature.
products that respondents were most comfortable purchasing or
subscribing to using a digital banking product without having human
interaction are a savings account (74%), credit card (48%), and term
deposit (27%). The most common reason for visiting a bank’s branch
was to deposit or withdraw cash (54%), followed by being asked to
submit physical documents (29%), and to open a new account (17%).
continued, “Over 60% of the respondents have been with their
primary bank for over a decade, and while many intend to stay with
their bank, their expectations of the services they receive are
changing and there is a significant portion of the market willing to
change for the right digital and financial experiences. Helping
customers easily manage their finances online, see everything in one
place in their mobile app, and quickly get the answers they need when
things go wrong are important to customers in this digital banking
individualised experiences will help banks succeed in today’s
competitive market. This could include personalised campaigns, unique
savings plans and options, and tailored re-financing options for
those needing to make significant changes. Around the world, and
particularly in the APAC region, there are banks offering
high-interest rate savings plans to generate and sustain customer
loyalty, and there are learnings from some of these success stories
that local banks could be adopting. There is also a clear opportunity
here for second tier banks to meet these new customer expectations
while one in ten customers are still determining where to move their
view the full report, visit here
Backbase is on a mission to re-architect banking around the customer.
Backbase created the Backbase Engagement Banking Platform – a unified platform with the customer at the center, empowering banks to accelerate their digital transformation. From customer onboarding, to servicing, loyalty and loan origination, our single platform — open and frictionless, with ready-to-go apps — improves every aspect of the customer experience. Built from the ground up with the customer at the heart, our Engagement Banking Platform easily plugs into existing core banking systems and comes pre-integrated with the latest fintechs so financial institutions can innovate at scale.
Industry analysts Gartner, Omdia and IDC continuously recognize Backbase’s category leadership position. Over 150 financials around the world have embraced the Backbase Engagement Banking Platform - including Advanzia, Banco Caja Social, Banco de la Nacion Peru, Bank of the Philippine Islands, Citizens Bank, Greater Bank, HDFC, Judo Bank, KeyBank, National Bank of Bahrain, Natwest, Raiffeisen, Standard Bank, Société Générale, and TPBank.
Backbase is a private fintech company, founded in 2003 in Amsterdam (global HQ), with regional offices in Atlanta (Americas HQ), New York, Boise, Mexico City, Toronto, London, Cardiff, Dubai, Kraków, Singapore (Asia HQ), Hyderabad, and Sydney.
PureProfile, on behalf of GBG, surveyed 1,003 Australian consumers in February, 2023, to understand how customers of the top 10 banks in Australia engage with their bank in-person, online and via their mobile application. The top 10 banks were Commonwealth Bank of Australia (CBA), Westpac, NAB, ANZ, Macquarie Bank Limited, Bendigo and Adelaide Bank, ING Bank (Australia), Bank of Queensland, Great Southern Bank, and AMP Bank.