All about trust
The good news for traditional banks is they still retain advantages in key areas such as trust, which has become a crucial front in the battle for financial relationship primacy. When it comes to trust, the local incumbent banks are operating from a position of strength with 72 per cent of Australian respondents saying they either completely or mostly trust their bank. For Australian respondents whose PFR is a traditional bank, confidence in their bank’s ability to protect their data (trustworthiness) and having a branch nearby so they can reach them when they want to (personal relationships) are the top-ranked trust factors.
Incumbent banks also have other inherent trust-related advantages, such as long-term relationships and a consumer preference to turn to banks when they need financial support during key life events. This strong legacy of trust is something banks can build on as they seek to strengthen relationships with the next generation of consumers.
On the other hand though, neobanks are gaining traction with consumers largely because of the superior products and personalised experiences they offer, with technology brands generally perceived by consumers to offer better products and services, and to be more innovative.
Consumers who choose neobanks for their PFRs mostly use them for deposits and digital payments. The emergence of payments as a core service within PFRs gives neobanks a clear competitive advantage since their offerings are generally strong in this area.
Strong privacy policies and features are the top priority influencing Australian respondents’ financial services purchasing decisions but rate and fee benefits and rewards also matter. The key though is to customise these benefits as generic offerings no longer attract attention.
Personalisation which helps maximise functional benefits linked to products, such as loyalty programs, are particularly valued by Australian respondents and can help deepen financial relationships. Other personalised experiences respondents say would motivate them to expand their relationship with their PFR include receiving the right offers at the right time and communications that show their PFR knows them and understands their life experiences.
Consumers should come away from every interaction thinking “my bank knows me well and treats me like an individual with unique needs”.
Playing the field
Consumers are also increasingly willing to have multiple financial relationships. The EY survey found most Australian respondents have multiple financial providers, with 39 per cent having three or more relationships. Given this fragmentation, it’s not surprising respondents are looking for seamless integration of their financial services across their multiple providers.
Further, more than 50 per cent of Australian respondents would value their most trusted financial providers partnering with other financial services and high-tech firms to expand their products and services – particularly Gen Z and millennial respondents.