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Is this the neo decade?
The 20s is set to be the decade where neobanks flourish, with one in four Aussies thinking about switching to a smaller bank, new research has found.
Is this the neo decade?
The 20s is set to be the decade where neobanks flourish, with one in four Aussies thinking about switching to a smaller bank, new research has found.
According to Mozo, neobanks offer up a better savings rate and have a lower variable rate home loan compared to the big four banks.
Mozo director Kirsty Lamont believes the neobanks offer a rate that the traditional bricks and mortar banks are unable to match.
“There’s been a major shift in consumer attitudes towards the big players in banking. The royal commission raised some serious trust issues and many Australians are fed up and ready for more competitive product offerings,” Ms Lamont said.
Australians have an appetite for an exclusively digital banking experience with competitive product offerings – 19 million Australians now do their banking on a smartphone or computer, and nearly 5 million have already moved, or intend to move to a neobank.
“With the majority of people doing their banking online, neobanks and other digital banks are one of the biggest threats to the stranglehold the big four banks have over the nation’s personal finances.”
“With lower overheads, smaller staff numbers and a focus on a smooth digital user experience, neobanks are able to react to market changes quickly and offer some of the most competitive rates on the market,” said Ms Lamont.
However, the neobanks still have to overcome some issues, with Mozo’s research finding that security ranked as the most important factor when it came to choosing a bank, with 40 per cent of Australians saying it was their top priority.
Almost half of those surveyed said they’d apply for a savings account or credit card online, while only 25 per cent would be willing to borrow from an online lender.
“The research shows that while many Australians are happy to move their money online, digital banks still have work to do to build trust. The fact is digital banks are licensed and governed in exactly the same way as the big banks, so there is the same level of risk across the board, which is very low,” Ms Lamont concluded.
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