PEDESTRIAN.TV has teamed up with COBA to let you know more about ethical banking.
When was the last time you lined up to make a deposit in the bank? Or had a chat with a bank teller? For many Gen Z individuals, the answer is maybe never.
Us Zoomers are a digital-savvy bunch, so we flock to doing as much as we can online, including finances.
A recent poll done by Glia showed that 73% of Gen Z and Millennials rely on a banking app to manage their finances, create savings goals and check their credit scores.
A huge difference across generations is how we engage with financial literacy. We rely on TikTok financial influencers or ‘Finfluencers’ to help navigate what investment apps are beneficial to our long-term savings goals, or even apps to lodge and document our expenses to keep our spending in check.
A big reason for this is that we demand so much more from our banks. A recent poll conducted by the Customer Owned Banking Association (COBA) has shown that 84% of Australians think it is essential for banks to have a purpose beyond increasing profits for their shareholders.
The past few years have made many grow disillusioned with some of the bigger banking institutions. In recent years, banks continued to report major profits, fermenting a growing realisation that banks lack a sense of purpose in supporting their customers, meaning our HECS debts have grown and our chances to own our own houses have become slimmer and slimmer.
To get the attention of Gen Z and Millennials, banks not only have to modernise their digital banking experience, but now have values, and to be seen executing on them. We’re now more than ever informed and engaged with social and environmental issues. We actively seek out companies that are vested to bring change.
The customer-owned banking model seeks to provide an alternative for consumers looking for a bank that prioritises its community and social movements. Customer-owned banks that prioritise members usually offer greater flexibility when cash rates increase and manage competitive pricing across credit and debt, deposits and loans because their shareholders ARE their customers and borrowers. This means they don’t have to pay returns to shareholders and they can focus on customers.
Bank Australia, for example, is a customer-owned bank leading environmental responsibility in the banking sector, pledging to be net carbon zero by 2035. If you bank with them, you can also claim offers on clean energy home loans to fund environmental upgrades and new home purchases or builds.
Fortunately, customer-owned banks provide strong support to their communities, with a report finding the sector distributes around $6 per member per year to charitable organisations and community sponsorships. This is equivalent to $30 million injected directly into the community. In comparison, analysis suggests the financial community contributions of the four major banks are only around $2 per customer on average.
In discussions about banks returning back to the community, more regional communities get left out of the conversation. Thankfully, there are plenty of great banks that are community-owned and support their communities. One such bank is Regional Australia Bank, which offers a community partnership program, donating a small percentage of savings to local charity organisations. Community-owned banking also has countless deals available that can help you reach your financial targets, and Regional Australia Bank follows through with that, offering $4000 cash back on refinancing your home.
In the past, we may have only stayed with a single bank throughout our entire lives, and that would be the bank our parents would set up an account in. However today, research shows that each generation branches out, choosing to have money in more than one bank account. We’re actually the most disloyal consumer base, with only 33% saying they use a single financial provider to handle their finances.
A part of this could just be because we’re savvier, jumping from banks to find the best interest rates on loans or credit cards, or it could also pay into our demand for a better digital banking experience.
If you’re eager to explore some of the many great benefits a community-owned bank might offer you, COBA has actually developed a tool that helps ease the pain points in finding a new bank and scoping out their relevant benefits and social commitments.
These can range from banks local to your community, investing in movements you personally believe in, or simply aligning with your personal financial goals.
With a recession looming, the cost of living ever-growing, and more and more becoming disillusioned with the financial sector, now is the time for us to educate ourselves on how we can best weather the storm and reach our financial goals.
If you’re looking for a new bank to put your money in that reflects your values, puts you first and injects money back into your community, consider using COBA’s search tool to discover your new bank.
Image: Drag Me To Hell