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Financial wellbeing: researching the community

The financial wellbeing of the Australian community affects everyone – and that includes companies and regulators alike in the financial services industry.

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Having a clear view of how consumers are spending and saving their money, particularly in this challenging economic environment, can help shape products, policies and processes.

"Everyone is out there developing tracking measures, finding a way for the people… to understand how they're doing from the standpoint of financial wellbeing.” – Dr Warmath

Laura Higgins, Senior Executive Leader of Financial Capability at The Australian Securities and Investments Commission (ASIC), was a member of ANZ’s independent steering committee for the bank’s research into financial wellbeing.

She is currently leading a review of the wider financial wellbeing research landscape in Australia. Aside from its better-known regulatory role, ASIC also leads Australia’s National Financial Capability Strategy and manages the MoneySmart consumer website.

Higgins sat down with Dr Dee Warmath, a Professor in the Department of Financial Planning, Housing and Consumer Economics at the University of Georgia, to discuss the various types of research charting financial wellbeing in Australia and globally – including the recently released ANZ Roy Morgan Financial Wellbeing Indicator.

Warmath says the fact so many people are now studying financial wellbeing rather than just the objective measures of household finance is a huge step forward.

“Everyone is out there developing tracking measures, finding a way for the people… to understand how they're doing from the standpoint of financial wellbeing,” she says. “There are opportunities for us to continue to evolve… We have the opportunity to augment our tracking with more diagnostic measures.”

Regarding the ANZ Roy Morgan Financial Wellbeing Indicator, Warmath says working with such a large dataset will enable researchers to undertake significant analysis.

“The possibility of having [over] 50,000 responses a year is just enormous,” she says.

Warmath says the indicator shows the financial wellbeing of Australians is on par with many similar regions.

“Most countries have the same situation, which is about average financial wellbeing,” she explains. “Right at the midpoint of the zero to 100 scale.”

You can hear more of the conversation between Warmath and Higgins in the video above.

Key factors for improved financial wellbeing

  • Australians are saving at their highest level in five years with median savings up from $A4,110 in 2014 to $A5,580 in 2019. Mean savings increased $A12,778 from $A29,430 in 2014 to $A42,208 in 2019.
  • The number of Australians with debit cards increased from 47.9 per cent in 2014 to 62.5 per cent in 2019.
  • The average unpaid credit card balance carried forward from month to month decreased from $A1,402 in 2014 to $A1,239 in 2019.

ANZ Deputy CEO Alexis George says the bank is encouraged to see Australians are generally meeting more of their daily financial commitments and are more financially resilient than they were five years ago.

“We want to help Australians to continue to improve their financial wellbeing and we believe the Indicator will provide the data and insights needed to ensure we’re helping our customers to adopt the habits and behaviours that will make the biggest difference,” she says.

You can read more about the ANZ Roy Morgan Financial Wellbeing Indicator here.

Michelle Commandeur is Head of Financial Inclusion at ANZ

The views and opinions expressed in this communication are those of the author and may not necessarily state or reflect those of ANZ.

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