• Likwidity

Is the storm about to break? When will bank customers change?

In January 2017 I wrote this article after listening to a number of fintech’s views on how customers don’t like change. This was before the Banking Commission was a twinkle in the eye. It is now October 2018 shortly after the release of the preliminary commission report, and this article is still valid. “When will banking/insurance/wealth etc customers realise that in many cases, they have not received fair value for their service.”. Does this mean that customers will change. Time will tell, but for now, I feel that this article is somewhat prescient.

Hot steamy summer afternoons when you are waiting for the storms to break and provide the respite needed and sometimes it just does not break.

Is that what Fintech success will be like? Just waiting for the pending momentum to reach tipping point? Is the tipping point going to be a wake-up by consumers and businesses that they cannot and should not maintain the status quo? The harsh truth is that most fintech start-ups are hamstrung by potential customers not wanting to change from, e.g their bank or mortgage provider.

Research has indicated that most consumers and businesses are generally dissatisfied with existing banking/ insurance service providers, and yet it is the least likely segment to switch service providers. Loyalty and allegiance to incumbents is particularly strong in Australia and the UK.

This is particularly important as the majority of Fintech activity appears to be in lending/ or related areas and this is the sector that have embedded dominance by the larger institutions.

Even the 2nd tier banking institutions have experienced this reluctance to change and for many it means pedestrian growth and limited inroad into lucrative products and segments.

Some articles have suggested that consumer switching is a vital part of the modern economy and leads to innovation and better use of resources.

So why is it so hard.? Regrettably I am not qualified to offer any answers. Some will suggest that its simply better service or product will drive new customers. But that is too simplistic. Part of the factors are steeped in cultural or national psychology and that will be hard to overcome in the short term.

Too often I see very promising and innovative start-ups with genuinely good products but their size and scale just does not permit them to endure long sales cycles to make a meaningful difference.

Interesting, this subject is not new but has been covered regularly and even resulted in a detailed research report for the Treasurer in 2011. (It will be interesting to see what movement or momentum has occurred since then.)

So is it maybe time to think out of the box and as a fledgling industry maybe embark on a national movement that sells the key message of change and alternatives and propel consumers and business to fairly evaluate alternatives. This was not entirely feasible a few years ago, but with the clear power of digital channels (see Donald J Trump), this could possibly be a much easier task now. That’s the challenge.



Likwidity Pty Ltd ABN 35619 192737   

Likwidity can source rates from participating banks through a combination of bidding or via bank rate sheets, and the highest rate shown may not always be available by the designated bank or the bank may withdraw such offer and Likwidity does not have control over that. Rates shown and interest benefits are derived from publicly available information and sources and may contain incorrect information.   

Users are referred to our Terms & Conditions.

Privacy Policy

Where Bank credit rates are shown, we source the information directly from the service providers. 

Ratings are shown for Short Term Deposits and are displayed as S&P/ Moody's. For more information on ratings, see our article

Pricing-Likwidity Offers a Monthly Subscription Fee

#Rates are generally based on interests paid on maturity. Minimum deposit amount of $2m. Rates are from Australian Banks who are protected by the Australian Government Guarantee Scheme of $250,000

Likwidity Pty Ltd © Copyright 2018. All Rights Reserved.

  • LinkedIn
  • Facebook