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The Evolution of Banking in Australia

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The Evolution of Banking in Australia Software and Technology The evolution of banking in Australia By Amaran Navaratnam* For most Young Credit Professionals car park during Christmas week, as we of Australia (YCPA) our first can shop online. banking experience started with a As our debit and credit cards Commonwealth Bank Dollarmite evolve so do the payment methods. savings account, we were excited Over the last 5 years PayPass and about the moneybox rather than PayWave have made us wave the saving aspect. As we matured goodbye to signing for retail into adolescents so did the banking purchases. In years to come I am experience. sure we will soon be farewelling the In years to come we will all have PIN. Our cards will always revisit the a story to tell our children of when surgeon for a ‘nip and tuck’ to keep we had to wait in line at the branch up with customers evolving needs in a “In years to come for 20 minutes patiently watching card with added benefits and tighter the flip clock. The reaction will be security. we will all have a priceless given what their first banking We have all experienced the gut story to tell our experience will be. wrenching feeling of leaving our wallet Technology and innovation was or purse at home and only realising children of when revolutionary in the late 2000’s half way to work. In 2015 Westpac driving us to the ‘Mobile Commerce’ and Commonwealth bank successfully we had to wait in generation with the ability to pay bills, launched its ‘Cardless Cash’ service do our internet banking and open new enabling us to use our mobile banking line at the branch accounts simply with the use of our app to withdraw money. If you leave for 20 minutes mobile. Something we definitely could both your phone and wallet at home not do on a Nokia 5110. then I hope the apple from the recent patiently watching Since 2009 we have all felt the fruit box delivery is still on your strong presence of digital marketing desk as it seems this will be your the flip clock.” and online shopping. What did the replacement lunch. banks do to cater for our online In the last 6 years our banks shopping obsession? They admitted have flexed their ‘CANSTAR’ the ATM card for plastic surgery! We achievements through their now refer to it as a ‘Debit Card’ with innovation, products and services its new appearance, rewards programs as rated by consumers. Some banks and greater security with the ‘Europay have invested over $500 million MasterCard Visa’ (EMV) chip making on innovation, behavioural science, online purchasing easier using our analytics, digital software and social own money. media platforms just to know us The Australian Bureau of Statistics better. Smart move. have reported in 2009 that online Banks have tailored credit retail sales totalled $24 billion with products and services to meet the most popular purchases being customer needs and wants. For travel and accommodation. In recent example, our banks have increased years with apps such as Groupon, their airline affiliations getting us daily deals, RedBalloon and other sites closer to the departure gates in Amaran Navaratnam there is no need to be stalking for a style by converting retail expenses 36 CREDIT MANAGEMENT IN AUSTRALIA • October 2015 Software and Technology “...we were excited about the moneybox rather than the saving aspect.” into frequent flier miles with added Putting aside the increase of cost smart when it comes to credit. It is benefits such as lounge access and of living in Australia, household debts easy to fall into the trap of effective travel insurance. Flying like a YCPA have soared in recent years. The marketing strategies but we as should! most worrying fact is that in 1990 the consumers need to exercise careful Cricket fanatic or not we were average household debt represented judgement, rather than instinct. The all captured by the Commonwealth less than six months of annual income. greater the household debt increases Bank advertisements on Facebook. That has now tripled to 18 months of in Australia the stronger the scent of Did they win me over? Yes. The annual income. a financial crisis gets. advertisements flooded my newsfeed The Australian Financial Security Is the lead up to 2020 in and I began reading cricket club Authority of Australia reported in banking going to be evolutionary or stories then finding myself calculating September 2014 that 3000 debt revolutionary? Truth be told, it will my borrowing power. This is a perfect agreements were lodged within the be both. The banking sector will face example of our banks innovative demographic age of 18-24. I think it’s greater challenges on how to win a marketing strategies through the use time for schools to begin educating greater customer base as they will of social media. students on credit consequences and continue to flex their innovations The evolution of banking in safety sooner than later, don’t you? in response to the evolving Australia has been exciting but has They are the future of the Australian forces of customer expectations, it created a cause and effect for economy. regulatory requirements, technology, consumers leaving us now financially Who is to blame for all this debt? demographics and shifting economics. over committed? It is us, the consumers. Australian How we as consumers contribute and Sure, we can be faster than John consumers in recent years have handle the changes will determine the Wayne to draw out our credit card focused on satisfying more of the future of our economy. u when we see interest free deals online wants in life as opposed to the needs. *Amaran Navaratnam is Business Development but can we repay this within the Moving forward to 2020, Manager Assistant at Recoveriescorp. interest free period? Australian consumers will need to act www.recoveriescorp.com.au October 2015 • CREDIT MANAGEMENT IN AUSTRALIA 37.
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