REPORT: Fintech is threatening Australia’s largest banks

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Roy Morgan has released an interesting report on Australia’s big banks, showing that fintech startups are stealing their most valuable customers.

In 2014, fintech investments grew over 200%, while Australia currently has the fifth highest rate of fintech use in the world. This has been backed up by Australian peer-to-peer lender SocietyOne, which reached $100 million of loans at the start of this month.

The most worrying part about this for the big banks is that Roy Morgan says 64% of those who have tapped into fintech offerings never plan to go into a traditional bank branch ever again.

As part of the $600 billion desire economy in Australia, it’s estimated 4.5 million Australians have a new digital-focused mindset where they search for better user experiences with their financial services.

These types of customers are also worth 2.6 times more than a person part of the traditional economy. ANZ, NAB and Westpac’s have about 29% of their total customer base in the desire economy, while CBA is at 24%.

Consumers in this desire economy are younger, better educated and significantly more tech savvy than those in the traditional economy. They are also three times more likely to apply for finance online and 62% rely on technology to keep them in control of their finances.

While Roy Morgan might suggest it’s all doom for the big banks, they still dominate 80% of Australian lending, and are trying to adapt to the changing market.

Many are building and investing in their own startups, while some like NAB have their own online-only banking solutions such as U Bank.