The “Uber” for banking has arrived!

By Steve Marsten

Recently a bunch of Gladstone Businesses gathered to hear commentary from one of the big four banks. It was quite sobering as he candidly explained why it was necessary for the banking systems in Australia to change.

Currently 80% of all banking transactions is “preferred to be carried out by customers” on the internet. That’s probably true. Busy people do their banking at night. Most transactions and bill payments are currently being carried out via our phones, iPads and Laptops. 

Only 15% of customers “want” to walk into a bank. Clearly we can all see what’s coming. Why would a business maintain heaps of real estate and office space to service 15% of their clientele? AND that portion is shrinking.

What was also interesting is the speed in which Chinese banks are growing around the world. One Chinese financial institution that only operates online, has grown to 200 million customers in  just 2 years and is expected to double again in less then 12 months!

The other economic point is that it costs the average Chinese bank (who only operate online) 4c for every $1 of earnings they receive from customers. It costs Australian banks about 40 cents! Many people already think that Australian Banks are the bogeymen of big business however in the scheme of things they will need to compete in Global markets or face ever declining revenues and customer bases. I know many will say that “we would never use a foreign bank” but the fact is many people in this country are already using European and American banks. When foreign banks are established without the cost of real estate, its obvious to see them making very attractive offers to the Australian Market in the not too distant future that will lure many customers away from their traditional financial suppliers.

One Big bank has copped a hiding for saying that they will be laying of several thousand personnel. I think they are just being honest with their shareholders and their customers. This is going to be the case for all big banks in Australia. The future of the financial industry is going to change rapidly only this time their “Uber” is coming from Asia.

Remember for all your financial business advice contact the team at Sothertons on 49721300.