Release
Will 2021 Be Paid In Installments? - Nature
10 Dec 2020 4:30 AM
Will 2021 Be Paid In Instalments?
“The Way We Bank” report from strategic insights consultancy, Nature, reveals the uncertain state of the financial services sector in Australia
· 36% of Australians have been negatively affected financially due to COVID-19
· 61% of Australians think now is a good time to “shake things up” in the banking industry
· 58% of Australians believe traditional banks should be doing more to support them in times like this
· 72% of Australians are already using one or more digital channels to do their banking
· 67% of Australians have never heard of neobanks
· 36% of Australians are using a budgeting app
· 38% of Australians are constantly tracking every dollar they spend
· 42% of Australians are considering using a buy now, pay later service this Christmas
“The Way We Bank”, a new study from leading strategic insights consultancy Nature, reveals that the global pandemic has resulted in Australians becoming more engaged with their financial affairs.
Nature’s research found 36% of Australians have been negatively affected by COVID-19, and almost two-thirds (61%) think now is a good time to “shake things up” in the banking industry.
For 63% of Australians, saving money has become much more important than ever before and 43% Australians have reviewed or created their budget and savings for the first time during the pandemic – and will continue to do so. Additionally, 35% of Australians are regularly reviewing the market for alternative financial products, which paves the way for an uptick in money management apps and services.
Nature Managing Director and Partner, Melbourne, Justin Connally, said: “With consumers being forced online, traditional banks have had to prioritise digital transformation and online customer service initiatives to ensure they can continue to support their customers.
“However, with restrictions now easing across the nation and “traditional” ways of banking – i.e. in-branch – becoming safe once again, will consumers fall back into these traditional ways or are their new behaviours here to stay?
“The latter seems to be the most likely outcome. Australians’ lifestyles have inherently changed, so it’s safe to assume that the way in which they bank will not fall back into ‘traditional’ ways. Also, given that more Australians are working from home and will continue to do so, the demand for online banking services accessible from anywhere has increased and will stay that way.”
Neobanks have a golden opportunity to grow
As Australians become more comfortable with online banking, traditional banks risk losing consumers to emergent neobanks. However, awareness of neobanks is low: 67% of people have never heard of neobanks and prompted awareness of the leading neobank, Up, is just 32%.
Eighty-two per cent of Australians aged under 55 are already open to the idea of using a digital-only bank for at least one product, but this doesn’t mean it will be their main financial service.
Mr Connally said: “The heightened sense of uncertainty in the wake of the pandemic allows the traditional banks to retain a level of trust that neobanks are yet to build.
“Switching to a neobank as their primary financial institution could be too risky and complicated a change for people to undertake, which begs the question: are Australians looking for short-term fixes to ride the pandemic out before implementing any major changes to how they manage their financial affairs?”
Digital 'money management' tools are trending
Sixty per cent of all Australians negatively affected by COVID-19 expect the next few years to be very difficult for themselves and/or their family. Consequently, they are turning to digital tools as quick fixes for planning for the future.
One in three (36%) are using a budgeting app, 38% are constantly tracking every dollar they spend and 44% of Australians are tracking their spending from time to time: companies including UP and Revolut are already offering a range of tech functionalities that are meeting Australians’ evolving needs.
Buy now, pay later (BNPL) will not slow anytime soon
For many Australians negatively affected by COVID-19, the next 12 months will be paid through instalments as a growing number of people turn to BNPL services to pay for a wide range of products and services.
The categories of products and services that consumers who have negatively affectively financially are most likely to use BNPL services for are:
1. Furniture and homewares (49%)
2. Tech and electronics (49%)
3. Holiday bookings (41%)
4. Apparel (37%)
5. Energy bills (33%)
6. Grocery shopping (28%)
7. Alcohol (22%)
For many, Christmas and the holiday season will be paid through instalments: 42% of Australians are considering using a BNPL service for their upcoming Christmas purchases, while 24% are very likely to use BNPL.
Mr Connally said: “Looking back at the tumultuous year, it’s not surprising that BNPL services are the favourite short-term fix for those negatively financially affected by COVID-19. This allows people to put their bills ‘on hold’ and retain a sense of financial normalcy. It also provides extra time and disposable income during a time when it feels most warranted.
“People who suffered most during the year feel the most deserving of a break. A strong bounce back in the travel/dining industry is expected, with 42% of Australians predicting they will spend more on such experiences in the future. Most of us agree it is time to have fun.”
For more information and interviews, please contact:
Andrew Knowles Sam Somers
Partner, SKMG Communications Consultant, SKMG
M: 0449 510 357 M: 0415 678 026
E: [email protected] E: [email protected]
ABOUT “THE WAY WE BANK” RESEARCH
“The Way We Bank” is based on quantitative research among more than 1,000 Australians aged 18 and older. The sample was representative of the national population. The research was conducted nationally during November 2020.
ABOUT NATURE
Nature is a 14-year-old strategic insights consultancy with 30 consultants across Melbourne and Sydney. Awarded B&T research agency of the year in 2018 and 2020, and twice a Grand Finalist in ESOMAR’s Global Research Effectiveness Awards, Nature combines human analysis skills with technology and data to create clarity so clients can embark on business decisions with confidence.