Through a survey of 1,009 Australians, Money Transfer Comparison’s research suggests that interest rates and fees have contributed to 71 per cent of Australians losing at least some trust in banks and 74 per cent considering switching to online services.
The survey found that 42 per cent of respondents have lost trust in some bank services and 28 per cent have lost trust in traditional banks as the best platform for all of their financial undertakings.
Money Transfer Comparison’s research found that a higher proportion of NSW and Victorian (both 72 per cent) residents — the states that are likely paying off the largest mortgages — have lost trust in the big banks due to their high fees. This is followed by 71 per cent of Queenslanders and West Australians, and just 60 per cent of South Australians.
Younger respondents are more likely to have lost some level of trust in traditional banking: 74 per cent of 18 to 54-year-olds, compared with 58 per cent of over-65s.
Alon Rajic, founder and managing director of Money Transfer Comparison, said: “Our research shows that the majority of customers are not blindly loyal to their banks — and will move elsewhere if rates and fees increase disproportionately. With so much information available online, and so much competition in the market, it is very easy for consumers to compare interest rates and fees across dozens of financial service providers.
“It is also fairly simple to switch to a new provider with the help of online comparison services — and I am encouraged to learn that three in four Australians are willing to make the switch to low-cost and innovative financial platforms if they can get a better deal. A significant consumer shift from traditional banks to innovative fintechs may also drive banks to increase their competitiveness.”
Money Transfer Comparison said it conducted the research to discover whether Australians would look to switch to “cheaper, online financial services when they feel their bank interest rates, fees and charges are too high”. Only a quarter (25 per cent) of respondents said they prefer to use services by traditional banks regardless of the level of interest rates, fees and charges.
Queenslanders (82 per cent) are the most willing to compare financial services fees and switch to online services if they were being charged too much. On the other end of the spectrum, 68 per cent of Victorians said they would compare providers and switch if they felt they were being charged too much by their banks.
The 35 to 54-year age bracket (80 per cent) was the most likely to look for cheaper financial services elsewhere, followed by 73 per cent of 18 to 34-year-olds and 67 per cent of over-55 respondents.
