The next generation of Australians has a unique list of requirements when choosing a bank.
As a generation, millennials (those born between 1982 and 2000) have grown up in a world where tech pervades many aspects of their lives. From online shopping and social media to replacing taxis with Ubers, the everyday lives of the next generation of Australians is more heavily influenced by technology than ever before.
So when it comes to all matters financial and managing their money, millennials have different requirements to their parents in choosing a bank. Let’s take a look at how you can choose the right bank to take care of your everyday banking needs as we move further into the 21st century.
The future is fast
If there’s one key thing that millennials want from a bank moving forward, it’s speed. The speed of logging in, checking balances, transferring funds and withdrawing money are all critically important to the next generation of Australians.
A 2015 study from customer experience firm SDL found that 49% of millennials prioritise convenience above all else from their bank. They want services that are easy to access and easy to use, and are eager to do away with complicated and outdated banking processes.
No-one ever enjoyed standing in line in a never-ending bank queue, but banks now have the technology to make everyday banking quicker and easier than ever before. Whether it’s opening a new account, applying for a home loan or just managing their money from one day to the next, millennials want to do it in the shortest amount of time and with a minimum of fuss. Why spend half an hour doing something that you should be able to do in five minutes, and why stand in line at a bank branch when you could complete the same transaction online?
In the same 2015 study from SDL, the next most important feature to millennials was saving money. The desire for low fees and home loans with low interest rates is understandably shared by all the generations, and millennials are keen to avoid paying any unnecessary fees.
Thanks to the wealth of financial education and information online, not to mention the ease of comparing products online through sites like finder.com.au, millennials are also quite savvy at getting value for money from their bank.
The more things change, the more they remain the same. In the modern world of online and mobile banking, the way most of us take care of day-to-day money matters is a long way from what it was 50 years ago – but there’s one thing that hasn’t changed. The number-one requirement for any Australian choosing a bank is that they want a financial institution that’s stable and secure.
A desire for a safe and secure bank is one value that remains constant across generations. And while the chances of a major Australian bank going bust are a lot rarer than they may have been in the past – the Australian Government even guarantees deposits of up to $250,000 in authorised deposit-taking institutions – in a world where online-only banks and lenders are on the rise, it’s just as important as ever to make sure you deal with a bank you can trust.
Unsurprisingly, the so-called “tech generation” wants banks that make use of up-to-date technology and the benefits it provides. Speed is the key for the instant gratification generation, regardless of whether they’re paying a bill, making a digital deposit or checking their balance.
The key areas where technology comes to the fore currently are in mobile and online banking. Smartphone apps must be simple and intuitive to use, free of bugs and any unnecessary wasted time. Online banking platforms need to be similarly accessible, allowing you to take care of all your everyday banking needs with a couple of simple clicks.
A May 2015 survey by RF Intelligence Group, Global Payments Evaluation Study, examined the world’s progression towards a cashless society. The survey of 32,000 respondents in 16 countries found that 66 per cent of Australians are aware that they own a contactless payment card and 53 per cent have actually made a contactless transaction. Contrast this with the situation in the United States, where just 14 per cent of people own a contactless card and an even smaller 9 per cent have used such a card for a payment.
It’s now estimated that Australians spend more than $2 billion a week on contactless payments, as we as a nation continue to embrace the speed and convenience of “tap and go”. Contactless payment infrastructure is well established right around the nation, so when you’re choosing a bank, looking for one that offers contactless credit and debit card payments through Visa payWave or MasterCard PayPass is an important step.
Online payments over mobile payments
Perhaps due to the fact that Australia has such a well-entrenched “tap and go” payment system, mobile payment systems such as Apple Pay and Android Pay are still yet to dominate our spending habits. However, they are on the rise down under and look set to become an increasingly important factor for millennials looking for a bank that understands their needs.
But while the mobile payments revolution is slowly taking off, it seems that Australians are addicted to online banking. In the six months to August 2016, CommBank recorded a whopping 840 million logins to online banking. In the 2015/16 financial year, online banking transactions totalled 606 million, much more than in-branch transactions (59 million) or ATM transactions (261 million).
These figures make it clear just how important online banking is to the next generation of Australians. Comparing the strengths and weaknesses of the online banking platforms offered by Australian banks is a crucial step to help you find the best bank for your needs.
A magnificent mobile app
Of the 840 million logins to CommBank online banking across the six-month period mentioned above, 75% of those were from mobile devices. In fact, there are 24 million logins to the CommBank mobile app each week, adding up to a weekly total dollar value of $4.6 billion.
These figures show that Australians love doing their banking on the go, so finding a bank with a practical and user-friendly mobile app is essential. Whereas previous generations might have chosen a bank based on little more than the convenience of its branch locations, the strength of a bank’s mobile platform is now a crucial consideration for millennials choosing where to park their money.
Social media presence
In April 2015, LinkedIn and Ipsos surveyed 9,200 millennials and gen-Xers across 10 countries, including 802 from Australia. It found that “Affluent Millennials”, who are those with at least AUD$100,000 in investable assets, place a high value on each financial institution’s social media presence when choosing a bank.
What content does the bank offer across social media? Can you communicate with the bank through its social media channels? Does the company have a good image online? How is the bank perceived in my own personal social network? The answers to these questions can have a big impact on which bank you choose.
Less emphasis on privacy
How much personal information do you feel comfortable sharing with your bank? While members of older generations are prone to keep their cards close to their chest when it comes to dealing with their bank, millennials are a little less concerned – as long as they get something in return.
With the rise of AI technology transforming the industry, banks are using big data to identify patterns and develop a more personalised experience for their customers. As an example, millennials might be happy for their bank to access their data if it helps create a more seamless banking experience, such as a mobile app that automatically knows which tasks or transactions to display first.Back to top
Branches are still important
When you consider the popularity of online banking in Australia, the emergence of online-only banks comes as no great surprise. The digital presence and offerings of the conventional banks are also critically important, with a wide range of everyday transactions now able to be completed over the Internet.
But that doesn’t mean bank branches are going the way of the dodo. Instead, it simply means that banks are being forced to make some changes to the branch banking experience they offer, replacing tellers, queues and forms with ATMs and iPads. And while it’s now possible to pay bills, transfer funds and much more online, many customers still prefer to handle their more complex money matters, such as financial planning and applying for a home loan, in person at a branch.
At 30 June 2016, there were still 5,357 bank branches in Australia, which was a slight reduction of 123 branches from the same time last year. Even though more and more transactions can be done online, finding a bank with branches close to you is still an important consideration.
Australia’s banking industry is fiercely competitive and the major players are increasingly aware that millennials have very different banking needs and desires to their parents. The bank that meets those key requirements, offering speed, convenience and flexibility for easy day-to-day financial management, will be the best placed to win over a whole new generation of customers. Compare banking services and features at finder.com.au to find the right financial institution to manage your money.