The COVID-19 pandemic has rapidly accelerated digital banking trends that were already on the rise. A new report by financial technology leader FIS, the FIS PACE Pulse Survey, looked at how Australians have altered the way they shop, bank and pay in response to the pandemic. 

Key findings

  • As many as 1 in 3 Australians formed a new banking relationship with a financial institution or non-bank lender during the pandemic.
  • The biggest driver of change was ‘starting a new chapter in life’ (29%), followed by ‘accessing products or services that other banks didn’t offer’ (25%).
  • Younger people were far more likely to make a change, with 52% of Gen Zs and 63% of Millennials forming new banking relationships compared to just 11% of Boomers.

Consumers expect digital choice

Consumers have grown accustomed to having choice about what channels and platforms they use for financial services and now expect, and use, more digital options from their lenders.

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.

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 percent of respondents indicated that they plan on returning to traditional banking methods.

Younger generations, particularly millennials, are using mobile payment apps more often, with 89% of millennials owning a mobile wallet, and using it regularly, but nearly half (45%) of all respondents had used a mobile wallet in the past month.

Australians are also rapidly migrating towards digital payments, with 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. Additionally, access to real-time/faster payments ranked as the most pressing need across generations.  

Banks are moving toward Buy Now Pay Later Services

One way traditional lenders are moving with the digital times is by offering their own Buy Now Pay Later (BNPL) services, including the CommBank app’s new StepPay service and Suncorp Bank’s PayLater service.

Given the huge popularity of Buy Now, Pay Later services, this trend seems likely to continue. While these services are very convenient, it’s important to be aware of the relationship between using Buy Now Pay Later Services and your credit score.

Changing financial priorities

The pandemic has shaken up many people’s financial priorities, with many experiencing financial hardship for the first time, unexpected unemployment or reduced hours.

Younger generations reported that their top personal financial goals are now reducing spending and increasing saving, with Millennials citing 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.

Should you change lenders?

Many of us stick with the same lender for years out of sheer convenience, but it could be worth reassessing if your lender is still meeting your needs. Some good questions to ask yourself:

  • Are you happy with the digital capabilities your lender offers?
  • If you are looking for a home loan, have you researched whether another lender might offer a more competitive deal and/or better conditions?
  • If you’re looking for a home loan, it pays to shop around and compare interest rates and loan conditions, such as whether you’ll have the option of an off-set account.

If there are specific issues you’re having with your current lender, it’s also always worth giving them a call first to see if they can do better to keep your business.

Having the right lender for your needs is an important part of your financial well-being plan, as is keeping an eye on your credit score. We’ve made it easier than ever to understand your credit score and what you can do to improve it.


Disclaimer: The information contained in this article is general in nature and does not take into account your personal objectives, financial situation or needs. Therefore, you should consider whether the information is appropriate to your circumstance before acting on it, and where appropriate, seek professional advice from a finance professional such as an adviser.