Australians Are Finally Ready To Walk Away From Their Banks For Lower Fees And Better Service

Scrooge McDuck throws counterfeit money (Photo: Carsten Koall / Getty Images)

Australians are ready to toss their old banks in favour of non-traditional finance houses with lower fees and better service, according to a new global consumer banking survey by EY.

All it would take is lower fees, say 60% of those surveyed, and an innovative approach (46%) to convince them to use a non-financial provider for banking services.

Paul Siviour, EY’s Oceania Banking and Capital Markets Leader, said: “Customer experience has become even more imperative in the face of increasing competition from new, non-traditional players who are offering highly tailored products and services. In this environment, banks that do not differentiate themselves through the personalisation of services are leaving themselves in danger of competing only on price.”

One-third of Australian customers surveyed have opened or closed at least one banking product in the past year and 22% plan to do so in the coming year.

High fees and charges (41%) were cited as the reason they had or would change their banking provider, followed by their experience with the provider (32%).

Of the two-thirds who are not planning to close or move their accounts, almost one in five (18%) said it was just too difficult or time consuming to change.

“The research shows that banking customers are not always being actively retained; they are simply remaining with their current provider through inertia and are therefore vulnerable to new competitors,” Siviour said.

“Australians are already happy to shop around for products and services that are easy to buy individually, such as credit cards, deposit accounts and mortgages. At the same time, new types of financial service providers with new technologies and customised services are starting to win more customers and cannot be ignored.

“The good news for banks is that a third (32%) of Australian survey respondents said they would very actively recommend their primary financial services provider.

“Aside from confidence in financial stability, the biggest driver of increased customer advocacy is personalisation of the customer experience. Banks have the opportunity to do this through tailored product and service offerings, advice on complex issues, and by providing a positive problem-resolution experience.”

“Traditional banks are already performing well on basics like trust, branch access and ATM availability but they are most vulnerable in areas with the highest growth potential, like digital offerings. There is a real opportunity for newer players to become primary providers by dominating the online and mobile space and providing a more personalised customer experience.”

Australian customers are embracing online banking at a faster rate than the global average, with 26% using online banking daily and 50% weekly, compared to just 20% and 37% globally.

While mobile banking use is on par with the global average (20% of survey respondents reported using it weekly), Australian branch and call centre usage is lower, representing a shift in the way customers choose to do business.

Siviour said: “Customers who have complete trust in their primary financial service provider are significantly more likely to recommend them to others (68%) than those who have only moderate levels of trust (20%). To maintain trust and advocacy, Australian banks need to continue to get the basics right while also increasing their focus on new technologies and personalising customer experiences.”

EY’s latest Global Consumer Banking Survey spoke to 35,642 customers.

NOW WATCH: Money & Markets videos

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.