Improvements in banking standards in the wake of the financial services royal commission are inevitable, but will be short-lived, a new survey of industry observers has found.
Of the surveyed respondents on finder.com.au’s panel, 83 per cent (15/18) said they believe the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry would prompt lenders to lift their standards; however, 39 per cent (7/18) of respondents said they expect such improvements to be “short-lived”.
Further, 17 per cent of the panellists said they don’t believe the banks will change their tune at all, while 44 per cent said they expect change to occur in the long term.
“It’s encouraging that many expect banks to step up and raise the moral bar, but whether or not this will be sustainable is another question,” Finder’s insights manager, Graham Cooke, said.
“In the coming months, we may see a rise in the number of bank customers switching or refinancing if they feel they’ve been wronged or if the trust is broken with their existing provider.”
The rate comparison website also asked respondents to assess the rise of fully digitised online “neobanks”.
When economists on Finder’s panel were asked if they believe neobanks would disrupt banking, 85 per cent were doubtful (11/13), with only Jordan Eliseo of ABC Bullion and Mark Crosby of Monash University expecting such entrants to disrupt the market.
Mr Crosby said: “Banks’ juicy margins reflect a lack of competition in the payments system and in wealth management. Banks do not have personalised service. Up, Xinja and others will attack the banks in those areas with more personalised and cheaper service offerings.”
Finder’s Graham Cooke added: “As neobanks are relatively new to [the] market, it could be too early to tell if they’ll disrupt.
“However, Australia is witnessing the emergence of neobanks who are breaking the mould of traditional banking as we know it, and this could be a game-changer.
“As more neobanks arise, traditional lenders may be forced to offer more innovative and highly tailored products if they want to remain competitive.”
Respondents were also asked to weigh in on Finder’s Economic Sentiment Tracker, with household debt the leading source of concern, with only 14 per cent “feeling positive” about the economic indicator.
Despite concerns over high property prices, 39 per cent of respondents said they “feel positive” about housing affordability.
Employment sentiment was strongest among respondents, with 48 per cent “feeling positive” about the job market.