Trending Financial News 31 October
Dollarmites in trouble again
Consumer lobby group CHOICE has revealed an investigation into Commonwealth Bank’s school banking program Dollarmites found the bank is marketing the benefits of credit cards to primary school children.
Commbank’s Smart Start program highlights the merits of credit cards as soon as students enter third grade. One crossword for children aged between 10 and 12 had “credit cards” as the answer for the clue: “Cards that allow you to obtain goods and services before you actually pay for them”.
CHOICE said the clue creates a misleading impression about credit cards. The Commbank description of the Smart Start syllabus states that the concept of credit cards is expanded and reinforced in workshops for Year 4 primary students.
Inflation edges up to 1.7 per cent
Inflation in Australia is edging closer to the Reserve Bank’s target of 2 to 3 per cent but only marginally. CPI inflation inched higher to 1.7 per cent in the September 2019 quarter according to the Australian Bureau of Statistics.
International holidays, travel and accommodation prices were all up along with clothing and footwear.
Tobacco was up 3.1 per cent, childcare and property rates both rose 2.5 per cent. Petrol prices fell 2.0 per cent, vegetables down 2.5 per cent and fruit fell 3.1 per cent.
Most Aussies unaware of neobanks
Australian bank customers want a better banking experience but most are unaware of the new online banks providing new innovative services said Kate Wilson, researcher at RFi Group in a speech to CEBIT Australia reported by BankingDay.com.
Currently less than 10 per cent of potential customers are aware of neobank brands.
“A bank like 86 400 had 3 per cent awareness [among potential customers],” said Kate Wilson.
Customers of existing Australian online banks such as ING and UBank are more likely to adopt a new neobank said Kate Wilson. ING now has the fifth highest market share of all retail banks in Australia.
Who are the switchers?
No bank has the best rates and the best service on all financial products for all financial customers. Customers need to shop around and compare banks and institutions to ensure they are getting competitive deals but many bank customers stay with one institution.
“Only 50 per cent of Australians have ever changed banks,” said Kate Wilson, researcher at RFi Group in a speech to CEBIT Australia.
Consumers who switch banks tend to be aged under 35, said Kate Wilson, because they are “taking out a home loan, combining finances, having children.”
Younger, city based, more affluent customers are more likely to switch banks said Kate Wilson.
They are also more likely to be migrants.
Would you switch to a neobank?
The rates are competitive, the apps are slick and the functionality is next gen. So why wouldn’t you switch your loans and accounts to a neo bank?
Switching banks is rare said Kate Wilson, researcher at RFi Group in a speech to CEBIT Australia.
And just because neobanks have a good online presence doesn’t mean millennials are rushing to switch.
International card transaction fees make Aussies want to switch
Australians are generally reluctant to switch banks even to save money but there are some issues that will shake bank customers out of their complacency.
Credit card fees for international transactions is an issue that makes bank customers consider changing banks said Kate Wilson, researcher at RFi Group.
There are plenty of options for travellers looking for fee-free withdrawals and international transactions.
Compare credit cards from banks, credit unions and other card issuers at InfoChoice.
Commbank is getting better – says union
Commonwealth Bank is becoming a ‘simpler and better’ bank under new CEO Matt Comyn’s leadership says the Finance Sector Union.
Commonwealth Bank yesterday withdrew a request for around 500 staff to repay performance bonuses, averaging $1,000 each, that they were awarded “in error.”
FSU assistant national secretary Nathan Rees said many of the staff who got bonuses were on annual salaries of around $60,000 and had already spent the money.
“Under Matt Comyn’s leadership, this result for CBA workers would suggest the Commonwealth is becoming a ‘simpler and better’ bank, and this is a good, sensible result.”