Banking sector in transition – whether you like it or not

A new survey reveals that the use of mobile banking continues to rise while traditional methods, such as visits to branches, continues to fall.

The Roy Morgan Satisfaction with Banking Channels Report shows that 63.6 per cent of surveyed customers used mobile banking channels in the 12 months to December 2021, a seven percentage point increase on the 56.6 per cent recorded a year earlier.

Visiting a branch was down 6.2 per cent compared with a year ago – from 53.6 per cent to 47.4 per cent – while phone banking was used by only 22.8 per cent of people, virtually unchanged on a year ago.

The drop in branch banking could be attributed to banks’ ongoing ‘re-education’ programs that encourage customers to use internet or mobile banking in preference to attending branches. It may also result in the closure of even more branches.

Read: Abandoned: Branches and ATMs disappearing across Australia

YourLifeChoices has been contacted by members complaining about National Australia Bank (NAB) directives to staff on this front, particularly in relation to being able to pay credit card bills at branches. NAB eventually said a directive about refusing those payments was “misunderstood”.

In terms of customer satisfaction with branch banking, NAB was last with 81.5 per cent.

YourLifeChoices has also reported on the Commonwealth Bank’s (CBA) ongoing reduction of branches and ATMs in suburbs and country towns across Australia. While many customers are happy to embrace the banking technology revolution, features such as mobile banking are a bridge too far for some older customers. And for many residents in more remote communities, access to a reliable and fast internet connection – integral to mobile and internet banking – continues to be a challenge.

Roy Morgan CEO Michele Levine says the latest figures are a milestone moment for internet banking. “For the first time in 2021, more Australians used a mobile banking app than [the] internet to conduct their banking (50.3 per cent, a drop of 9.1 percentage points compared to 2020).

Read: The bank that doesn’t want your money

The survey also revealed that of the ‘Big Four’ banks, the CBA edged out its competitors in the mobile banking satisfaction ratings, albeit only just. The CBA also led its competitors in internet banking and branch banking, but came last of the four in the area of phone banking.

Roy Morgan defines mobile banking as using an app on a mobile phone or tablet. Internet banking is defined as “visiting a bank’s website”, phone banking as “calling the bank directly” and branch banking, as the name suggests, as visiting a physical bank branch.

Interestingly, the report makes no mention of automatic teller machines and their use. YourLifeChoices has contacted Roy Morgan for clarification.

Ms Levine says “the rise of mobile banking apps is coming at the expense of visiting a branch.

Read: 10 simple ways to protect yourself when doing your day-to-day banking

For many bank customers, the transition to mobile banking is being driven by branch closures in suburbs and country towns. Consumer advocacy website CHOICE reports that between June 2017 and June 2021, there were 575 bank-branch closures outside metropolitan areas, and a 34 per cent drop in the number of ATMs.

In a CHOICE survey of more than 6000 bank customers, many respondents claimed that accessing bank services had become more difficult. It concluded that for older Australians or people with disabilities, the banking industry’s cost-cutting measures had turned financial management into an onerous undertaking.

Roy Morgan’s research may indeed paint a positive picture of customers’ experience with online banking, but there are many out there who would prefer the option of visiting a branch, or an ATM at least.

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Written by Andrew Gigacz