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How has Australia’s financial services market changed since the Financial System Inquiry?

Roy Morgan Research CEO Michele Levine presented the latest State of the Nation Report this week.
Roy Morgan Research CEO Michele Levine presented the latest State of the Nation Report this week.

The report casts a spotlight on the dramatic changes to the financial services industry since the 1997 Financial System Inquiry, compiled using 17 years’ worth of consumer-focused financial metrics and a detailed perspective on the dynamics of this complex market.

With the 2014 Financial System Inquiry now underway, this report provides an invaluable update on the issues that shaped the 1997 inquiry and considers how they will inform the current one.

Key findings:

  • Since 1997, the Australian consumer financial services market has grown at ten times’ the rate of the population!
  • Superannuation and lending have been the principal drivers of growth, with super now the major financial category, equivalent to just under half the total market value of financial services. Lending grew by 324%.
  • The over-50s are an increasingly dominant force, comprising 39.5% of the population 14+ and 55.9% of the financial services market
  • The top 20% of customers based on financial value control 64.8% of the value, while the bottom 40% account for just 2%
  • Since 1997, the rise of technology has been stratospheric, and has impacted heavily on channel selection. Internet banking has surpassed branch usage, and mobile banking is the latest growth channel – especially among younger age groups.
  • ‘Big 4’ banks have increased their market strength, despite the 1997 inquiry predicting that new entrants and shifting market dynamics would result in more competitive conditions.
  • The ‘Big 4’ banks have increased their customers’ overall ‘share of wallet’ but customer loyalty remains low.
  • Customers’ satisfaction in their banks has skyrocketed, representing one of the market’s biggest changes since 1997, and switching intentions are down. But businesses are less satisfied with their banking relationships.
  • Only 25% of Australians rate financial planners favourably in terms of their ‘ethics and honesty’.

As usual, this quarterly State of the Nation report also contains the latest statistics on Australians’ attitudes and behaviours as revealed through extensive face-to-face interviews across the country.

For more information or to organise an interview with CEO Michele Levine, please contact:

Nikki Taylor
Office: (03) 9223 2486
Mobile: 0425 812 773
nikki.taylor@roymorgan.com  

About Roy Morgan Research

Roy Morgan Research is the largest independent Australian research company, with offices in each state of Australia, as well as in New Zealand, the United States and the United Kingdom. A full service research organisation specialising in omnibus and syndicated data, Roy Morgan Research has over 70 years’ experience in collecting objective, independent information on consumers.

In Australia, Roy Morgan Research is considered to be the authoritative source of information on financial behaviour, readership, voting intentions and consumer confidence. Roy Morgan Research is a specialist in recontact customised surveys which provide invaluable and effective qualitative and quantitative information regarding customers and target markets.

About Roy Morgan’s State of the Nation Reports

Roy Morgan’s State of the Nation Reports provide a long-term perspective on Australian society. Released quarterly, the Reports measure a broad range of issues affecting the nation, plot them over time, and explore in more detail the impacts on Society, Technology, Economy, Politics and the Environment.

The latest Report is State of the Nation Report 18: Spotlight on the Australian Financial Services Market Since 1997.

View previous Roy Morgan State of the Nation Reports