A new report has revealed the extent of the digital revolution underway in Australian banking with 98.9% of customer interactions now taking place via apps or online, and cash being used for just 13% of payments (down from 70% in 2007).
To get a clear picture of the transformation underway in Australian banking, the Australian Banking Association (ABA) has partnered with Accenture to produce the Bank On It - Customer Trends 2023 report which will be released at the ABA's annual conference today.
"Australia has witnessed a phenomenal shift in customer banking and payment preferences in recent years."
ABA CEO Anna Bligh
Key findings of the report include:
- The way Australians bank is changing:
- Cards have rapidly replaced cash, with 75% of payments occurring with cards compared to 26% in 2007
- Cheques have further declined from 1% of all payments in 2007 to just 0.2% in 2022
- At the same time, the use of mobile wallets is rapidly increasing:
- Over 15.3 million cards were registered to mobile wallets in 2022, up from just over two million cards in 2018 - a 760% increase
- The value of mobile wallet transactions reached $93 billion in 2022, up from $746 million in 2018 - a 12,400% increase
- The number of mobile wallet transactions increased to 2.4 billion from 29.2 million - an 8,200% increase.
- Australians have decisively moved to digital banking with 98.9 per cent of interactions taking place digitally. Between 2019 and 2022 there was:
- An increase of 21% in online banking interactions
- A 31% increase in app interactions, and
- A 46% decline in branch interactions.
- While the numbers of branches in Australia have decreased over the past 20 years, Australia has a notably higher branch density, at 24 bank branches per 100,000 adults, than the two most comparable OECD countries by urbanisation: New Zealand and Finland.
- Australians have traditionally been early adopters of digital payments, leading UK, Germany, France and the United States with:
- An average of nearly 500 cashless payments per person each year, and
- 60% of e-commerce transactions taking place through mobile.
- To keep up with demand for digital banking, banks have increased their expenditure on technology with an eight-fold increase in technology investment since 2005, up from $3.5 billion to $28.5 billion.
- Australian banking customers are most satisfied with digital channels, with net satisfaction 81% for online (website) customers and 80% for online (app) customers.
"Australia has witnessed a phenomenal shift in customer banking and payment preferences in recent years," ABA CEO Anna Bligh said.
"As a nation we are early adopters of new payment options. Globally, Australians are now at the forefront of adopting cashless payment methods and it's clear these recent technology leaps are now permanent consumer preferences."
Ms Bligh said banks are responding to customer's growing preference for digital banking with an eight-fold increase in technology investment since 2005, up from $3.5 billion to $28.5 billion.
"As customers increasingly shop, pay, or are paid digitally, they also expect their banking and payment services to be available digitally in a format that is convenient, fast, cost-effective and secure.
"While customers drive these rapid shifts to digital banking and payments, there will continue to be a role for face-to-face banking services.
"Branch density remains higher in Australia than in most comparable countries globally. For banks that participate in [email protected], the report shows that 98% of branch closures occurred within three kilometres of a branch of the same brand or one of the 3,540 [email protected] locations across the country - a service that is funded by Australian banks."
Hessel Verbeek, a managing director at Accenture, said the report shows the unprecedented nature of the customer-led shift to digital channels.
"We know that customers are choosing digital interactions in many aspects of their lives, well beyond banking," Mr Verbeek said.
"This report shows the scale and pace of the customer shift to digital banking, and the digital transformation by Australian banks."
