A new survey has revealed that Australians are remarkably loyal to their banks, often sticking with the same institution for years. However, this steadfast loyalty appears to be doing little to benefit their financial health.
Loyalty Without Reward
The survey, conducted by cryptocurrency exchange Kraken among 1,000 Australians, found that nearly two-thirds of respondents have remained with their current bank for at least five years, with many staying far longer. Despite this, 64 per cent of those surveyed believe their bank does not reward their loyalty through better interest rates, benefits, or everyday spending incentives.
Jonathon Miller, Kraken’s managing director in Australia, commented on the findings: “Old habits die hard, and for many the thought of switching still feels risky or inconvenient. The banking landscape here has been concentrated for a long time, and that familiarity keeps people in place.”
Cost of Apathy
This reluctance to switch can come at a significant cost. Four in 10 respondents reported that their bank’s returns failed to keep pace with inflation, meaning their savings were effectively losing value in real terms. The findings emerge during a period of higher interest rates, which have increased pressure on borrowers but also helped boost margins across the banking sector.
Generational Differences
Data from Finder, released in December, indicates that Generation Z is the most likely to switch banks. Eighteen per cent of Gen Z respondents said they had changed savings accounts in the previous six months, compared with just 7 per cent of Generation X and 4 per cent of baby boomers. This pattern extends to other household bills, with Finder data suggesting Gen Z is also more inclined to shop around for insurance and energy providers.
Changing Consumer Expectations
Kraken’s research points to a shift in what consumers expect from financial providers. A substantial 88 per cent of respondents expressed a desire for access to products that generate passive income or yield to help preserve wealth, rather than leaving cash in low-return accounts. As fintech platforms, digital wallets, and non-bank providers continue to expand, Mr. Miller noted that Australians are becoming increasingly aware of banking alternatives.
“The cost of switching is coming down and it pays to look around,” he said. Nearly 90 per cent of respondents indicated they would consider switching providers if they could earn competitive rewards on everyday spending, such as transactions, bill payments, or card use.
For those looking to make their money work harder, the message from the research is clear: loyalty may be commendable, but in today’s financial landscape, it might not be the most rewarding strategy.
