Financial Services

Australian banks navigating fast-changing customer expectations

Tales Sian Lopes

Australians' perception of the banking industry is at rock bottom. Banks and financial services rank at the lowest of sectors seen to "benefit society" - a low statistic equalled only by Government. While 56 percent of people surveyed saw healthcare as most respected for benefit to society overall, and 35 percent respected education as an industry, just 13 percent held the same sentiment towards banks.

There's clearly a huge gap to be addressed. It comes as technology is rapidly reshaping the banking industry beyond recognition. Banks face a stark choice: lead the way by offering personalised, AI-enabled, customer-focused products and services, or get left behind. Under pressure from within and without, Australian banks are looking at what the future of their business models might be: what will the value and role of a bank be to society in five to ten years?

Publicis Sapient has carried out a landmark survey to look at customer attitudes and expectations in this changing landscape, and how banks should respond to ensure they remain competitive in future. We spoke with more than 5,000 Australians from all walks of life to understand how they interact with their banks today, and how they expect to engage tomorrow.

Macro events such as the Royal Commission and the pandemic have influenced perceptions and attitudes to banking. Australians perceive banks as secure, responsible and trustworthy, however they also view them as expensive and unaccountable. Banks must ensure their strategies are aligned with changing trends.

The findings cover a broad range of topics, from the cost-of-living crisis and the purpose of physical bank branches to the rise of AI. The survey identifies five key trends that we see running through the responses, and the critical actions that banks must take to address them.

The personalisation challenge

Customers want personalised services, and most believe AI will help banks to deliver that. Interestingly, customers tend to connect personalised services to physical channels instead of digital. Banks must develop an omnichannel strategy to reimagine this experience in their digital channels, leveraging the power of AI.

Top shot of a group of people walking on a pavement

The evolving role of branches

Many customers feel that banks are moving to digital offerings at an uncomfortably fast pace. Our research shows a clear majority of customers opposing banks eliminating cash services from branches. More than three-quarters of customers still carry cash, and this rises to 93 percent among elderly customers. Banks must deliver a model for the future that supports customers and communities particularly around cash services, while solving for their own economics.

Scams and security

Customers traditionally see banks as secure and trustworthy institutions. But the survey reveals increasing consumer concern over scams and expectations of banks’ role in providing support. Customers need education and proactive support from banks to maintain confidence in their security measures. Banks must continue evolving their capabilities in security and scam prevention while also enhancing customer experiences and awareness.

An old person sitting on a bench, talking on mobile phone

A person facing a fruit and vegetable shop

The cost-of-living crisis

Customers expect banks to support their financial wellbeing, particularly in an era of cost-of-living crisis. Banks must invest in providing proactive, data-driven customer care that elevates customer experience, for example, by identifying warning signs early and offering guidance to get back on track.

A greener future

An increasing number of customers want green banking products, and this desire will eventually become an expectation. Banks need to think beyond "reporting green" and must start to build a strategy for retail customers that emphasises sustainability and social responsibility.

Windmills in the middle of a green meadow

Banking is at a crossroads, where the ability to adapt and innovate will determine the market leaders of tomorrow. The insights from our research should spark productive conversations and drive the banking industry towards a more customer-centric and technologically advanced future.