The convenience of online banking and higher interest rates are driving interest.
Nearly one in five Australians (18%), or 3.5 million people, now holds a digital bank or neobank account, according to a study by Finder.com.
Digital banking adoption is up 9 percentage points (ppt) from last year, likely due to a preference for online banking throughout the COVID-19 pandemic and the search for higher returns on savings rates, the study noted.
Men are currently more likely to have a neobank account than women, at 21% of men vs 15% of women having a digital-only account. Generation-wise, 28% of Gen Z have a neobank account compared to 21% of Millennials, 16% of Gen X, and 8% of Baby Boomers.
Meanwhile, non-users have also indicated interest in a neobank account if given the right conditions. Notably, 26% or over a quarter of all Australians said they would consider opening a neobank account if it offers a higher savings rate.
Other possible drivers of adoption include the convenience of online banking (69%), ease of transferring funds (39%), and free overseas transactions (35%).
"Our research shows when Aussies choose a new transaction account, their hate for monthly account fees outweighs their love of other features. Neobanks often don't charge any monthly account keeping fees, whilst many traditional banks still do,” said Alison Banney, banking and investments editor at Finder.
“Two in five Aussies say they want a banking provider with an easy-to-use app and 13% say budgeting tools and features are important,” she added.
However, many also are not open to the idea of digital-only banks, saying they’re happy with their current bank (49%), like having a physical branch (44%), think neobanks are too risky (34%) or just don’t trust neobanks (29%).
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