Australians are dumping branches and ATMs in favour of online banking

  • By Zilla Efrat

Customers are increasingly choosing technology options over traditional banking methods, a new analysis by the Australian Banking Association (ABA) finds.

Its data reveals that more than 80 per cent of Australians say they prefer to check account balances, pay bills or transfer money online. It also shows that more than one in three Australians with smartphones use a digital wallet.

In addition, ABA’s research finds that one in 10 Australians regularly leave home without their wallet, preferring to use their phones to pay for items – a jump from just four per cent in 2019.

Interestingly, less than 20 per cent say they prefer to do any banking activities in branches.

The steady decline of cash and credit cards is confirmed by RBA data which reveals that ATM withdrawals have dropped by 20 per cent in the year to August 2021, after falling 16 per cent the year before.

ABA CEO Anna Bligh says COVID-19 has influenced banking choices for Australians. She believes these customer-led changes are here to stay.

“COVID-19 accelerated trends in our society and changed the way we live our lives,” she says.

“Working from home will forever be more prominent within the workforce. We have steered away from using cash and as a result, we 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.

“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.’

Bligh notes that one major Australian bank reported digital banking is now the primary channel for its customers aged between 16 and 69 and that its digital interactions are up 10 per cent since 2019.

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

Despite a move away from traditional banking methods, banks continue to provide face-to-face banking options and maintain thousands of branches across Australia.

More than 80 banks and financial institutions are also part of Bank@Post, an Australia Post service that enables customers to manage their money at its 3,500 post offices across the country, including more than 1,800 in rural and remote locations.

The data used for ABA’s analysis are based on surveys conducted by RFi Research and its interviews of at least 2,000 Australians throughout 2021.

It found that the proportion of smartphone owners using a digital wallet – including Apple Pay, CommBank Tap & Pay, Google Pay, Samsung Pay, NAB Pay, WeChat Pay & Alipay – rose to 37 per cent in the 18 months to September 2021, up from 18 per cent in March 2020.

The frequency of digital wallet usage also escalated, with just over 71 per cent of users of digital wallets reporting weekly usage in September 2021, up from 40 per cent in March 2019.

At the same time, the use of branches continues to decline with 72 per cent of Australians reporting they did not visit the branch of their main bank in the month leading up to September 2021.