Is Your Lender Meeting Your Needs?
Many of us stay with the same bank or lender for years out of sheer convenience, but is your lender meeting your needs? Recent research highlights the importance of regularly reassessing your needs and priorities and seeking financial advice to find the right fit for you.
During the COVID-19 Pandemic, nearly 1 in 3 Australians formed a new banking relationship with a financial institution or non-bank lender, according to a report by financial technology leader FIS. The FIS PACE Pulse Survey examined how Australians have altered the way they shop, bank and pay in response to the pandemic.
The main drivers of change were the desire for better banking relationships and greater digital capability. FinTech start-ups have changed the game, giving consumers much more choice in how they bank. Traditional banks now need to keep pace or risk losing customers.
While these changes were already underway, the pandemic has further disrupted traditional banking, payment, and shopping behaviours. Consumers have become more used to using digital channels and platforms to access financial services.
Digital transactions have increased dramatically, with Australians shifting from in-branch transactions to online or mobile banking. Only 7% of those surveyed said they intended to return to more traditional forms of banking. Australians are also migrating to digital payments with QR codes currently being the most popular.
The age of respondents had a big impact on their banking needs and behaviours. Younger generations, particularly millennials, are now using mobile payment apps more often, with 89% of millennials owning a mobile wallet, and using it regularly.
Of the Australians who found a new lender, the biggest group were young millennials (63%), followed by Gen Z (52%), compared to just 11% of Boomers.
Key findings from the survey
- 30% of Australians formed new banking relationships in the last 12 months.
- The desire for better benefits (31%) was the primary driver for entering a new banking relationship, followed by ‘starting a new chapter in life’ (29%), and ‘accessing products or services that other banks didn’t offer’ (25%).
- 36% of those surveyed increased their use of QR codes when shopping in-store, and 31% are using cash less often. Access to real-time payments is the most pressing need across generations.
How the pandemic has changed our financial priorities and behaviours
The pandemic has made many of us rethink our financial priorities. Younger generations reported that their top personal financial goals are now reducing spending and increasing saving.
With many found to have experienced employment disruption during this time, millennials cited building an emergency fund as their top goal, following by setting a budget and sticking with it. For Gen Z, saving for a house topped the list, followed by building an emergency fund.
Is it time to change lenders?
If the pandemic has changed your financial priorities and banking behaviours, it could be time to reassess if your lender is still meeting your needs. Are you happy with the digital capabilities and personal service they offer? If you are looking for a home or personal loan, have you researched whether another lender might offer a more competitive deal and/or better conditions?
Before you make any major changes, it’s always important to get financial advice first. As financial advisors we can help you identify your short and long-term financial goals, priorities and banking needs. We also have access to specialised tools that can find the best products and services currently available, tailored to your specific needs and circumstances.
Call us anytime on (02) 8268 2900 for an obligation-free chat.
Disclaimer: The information contained in this article is general in nature and does not take into account your personal objectives, financial situation or needs. Please consider whether the information is appropriate to your circumstance before acting on it and, where appropriate, seek professional advice.