Nearly 1 in 3 Australians have entered a new banking relationship with a financial institution during the COVID-19 pandemic, according to a new report released by FIS.
The FIS PACE Pulse Survey examines how Australians have altered the way their shopping, banking and paying for goods ands services in response to the COVID-19 pandemic.
Highlights of the FIS PACE Pulse Survey
Digital transactions have accelerated, with Australians shifting from in-branch transactions to online or mobile banking. This is likely to be a lasting shift, as only 7% of respondents indicate they are gradually returning to their traditional methods of banking.
Australians are also migrating to digital payments, QR codes being the most popular.
36% have increased their usage of QR codes when shopping in-store, while 31% are using cash less often now. Access to real-time payments is the most pressing need across generations.
The FIS report found that younger generations were often the quickest to make changes.
52% of Gen Zs and 63% of young millennials started a new banking relationship last year, while just 2% and 4% respectively are returning to conducting transactions in branches.
Led by millennials, the younger generations are also using mobile payment apps more often. 89% of millennials own a mobile wallet, and amongst these 99% have used it in the past month.
“Australian consumers are seeking better banking experiences and prioritizing digital.”
“As competition in the banking sector intensifies with new tech-savvy entrants winning market share and consumers quick to enter into new banking relationships, it is critical for banks to offer a compelling customer experience,” said Adrian Toynton, Banking Solutions at FIS.
“To retain and win new customers, banks must modernize their platforms and harness advanced technologies, like cloud and API-enabled banking, to provide a seamless experience.”
“Banks should also watch the habits and preferences of Gen Zs and millennials who are undoubtedly a crucial demographic that will determine what next-gen banking looks like.”
FIS PACE Pulse Survey key banking trends
30% of Australians started new banking relationships in the last 12 months.
52% of Gen Zs and 63% of young millennials were more likely to start new banking relationships, compared to just 11% of boomers.
Only a small fraction (5%) of respondents transitioned from unbanked to banked, with newly banked consumers skewing heavily toward Gen Zs and young millennials.
One-quarter (25%) of respondents cited other key motivators.
The desire for better benefits (31%) was the primary driver, followed by ‘starting a new chapter in life’ (29%) and accessing products or services that other banks didn’t offer (25%).
43% stated they will continue to use online/mobile banking post-pandemic. 7% indicate they are gradually returning to their old ways of banking.
Of all generations, baby boomers (13%) are the most likely to return to conducting transactions in branches, and Gen Z (2%) and young millennials (4%) are the least likely.
FIS PACE Pulse Survey key payment trends
36% of respondents have increased their usage of QR codes and 24% have increased their use of tap-and-pay (contactless) when shopping in store.
31% said they are using cash less often now.
89% of young millennials own a mobile wallet, versus 35% of boomers. Amongst the young millennials who own one, 99% have used it in the past 30 days.
Access to real-time payments ranked highest across generations. Millennials are most in need of access to real-time payments immediately (16%) or within six months (28%).
The report provides insights into the financial health and attitudes of Aussies post-pandemic.
The top personal financial goals amongst the younger generations suggest a desire to rein in spending and start saving in the aftermath of the pandemic.
FIS PACE Pulse Survey key findings
Young millennials cite building an emergency fund (26%) as their top goal, following by setting a budget and sticking with it (24%).
Saving for a house tops the list for Gen Z (31%), followed by building an emergency fund (27%).
One-quarter of Australians were found to have suffered a job setback in the past six months, with young millennials and Gen Zs being most vulnerable.
4 in 10 young millennials suffered a job setback, most often a pay cut (14%), temporary lay-off/furlough (11%) or deferred promotion (12%).
36%t of Gen Zs had a job setback and were more likely than other generations to experience a pay cut (22%) or a permanent job loss (11%).
Nearly two-thirds (65%) of young millennials said they wouldn’t be able to sustain themselves longer than a month after a pay cut. 58% of Gen Zs indicated the same.
On the other hand, 39% of boomers said they could financially survive more than one year.