Fewer than 1 in 5 using bank branches

A new analysis published by the Australian Banking Association (ABA) on Tuesday (19 October) has suggested that more Australians are becoming inclined to bank online rather than in a physical location. 

Building off a survey conducted by RFi Research that interviewed over 2,000 Australians throughout 2021 regarding their banking and digital spending behaviours, the ABA found that over 80 per cent stated that they preferred to check their account balances, pay bills, or transfer money online.

The analysis also found that less than 20 per cent of respondents preferred to do any banking activity in a branch whatsoever. 

Comparatively, 72 per cent of respondents reported that they did not visit the branch of their main bank in the month leading up to September 2021. 

The survey reported that more Australians are embracing technology for their financial transactions, with 37 per cent of respondents with a smartphone stating they use a digital wallet. In March 2020, this figure was 18 per cent.

The frequency of digital wallet usage has also increased, with more than 71 per cent of digital wallet users reporting weekly usage in September 2021, rising from 40 per cent in March 2019.

The ABA has also stated that one in 10 Australians regularly leave home without their wallet, using their phone to pay for items, growing from just 4 per cent in 2019.

According to ABA chief executive Anna Bligh, these figures are related to COVID-19; the pandemic expediting a customer-led change in banking choices that’s here to stay.

“COVID-19 accelerated trends in our society and changed the way we live our lives. Working from home will forever be more prominent within the workforce, we have steered away from using cash and as a result are seeing an increase in card and technology payments and the existing trend of doing banking online instead of in a branch has only continued,” said Ms Bligh.

“As we have seen more people go away from using branches, it’s no surprise to see banks invest in areas where customers prefer to bank, such as in their online platforms and apps.”

Ms Bligh added that an undisclosed major Australian bank reported that digital banking is now the primary channel for its customers aged between 16 and 69, with digital interactions up 10 per cent since 2019. 

“This same bank reported a steady branch usage drop of 32 per cent since January 2019,” she concluded.

According to the ABA, other data shares a similar trend, with the Reserve Bank of Australia (RBA) stating that ATM withdrawals decreased by 20 per cent in the year to August 2021, after falling 16 per cent the year before. 

Furthermore, the analysis is supplemented by the Commonwealth Bank of Australia (CBA), Westpac Bank, and the Australia and New Zealand Banking Group Limited (ANZ) confirming the closure of some of their branches in recent months. 

However, additional data suggests that this increasing trend of digitalisation is not replacing the need for advice.

Data analytics company FICO, found that less than one-third of Australians are willing to apply for a mortgage digitally if they were given the opportunity. 

Moreover, in September, the Mortgage & Finance Association of Australia (MFAA) published data that found that mortgage brokers had settled $78 billion in home loans in the June quarter, marking the highest quarterly figure ever achieved. 

[Related: Australians less likely to apply online for mortgages]