NAB’s chief executive Ross McEwan neatly summed up the extraordinary pace of change in consumers’ relationship with banking when he said recently: “Permanent change, in my mind, has just been made in 10 weeks. It would have taken us another five years.”
McEwan was referring to the rapid take-up of digital payments since coronavirus upended our lives. The trend was well underway before the virus appeared, but the pandemic has sped up the pace of change to a rate of knots.
What is more, leading bankers say the shifts in behaviour are here to stay. For banks and investors it is a mixed blessing.
Coronavirus has transformed more than just our shopping habits – it is fundamentally changing some of the key ways in which Australians deal with money itself. On the rare occasions when people have ventured outside to visit shops in recent months, they’ve shunned cash for fear of spreading the virus, instead tapping their card or phone at the checkout.
A surge in home-delivered groceries and Uber Eats has further propelled the rise of digital payments, at the same time as hundreds of bank branches have been temporarily closed and ATM withdrawals have collapsed. And if you’ve taken out a mortgage or refinanced, it’s far more likely that process has been a more digital one.
“I think that movement towards digital is not going to go away and with people feeling comfortable with doing more major transactions online, I think we can expect that to be a permanent change,” says Alexis George, the deputy chief executive of the ANZ Bank.
McEwan also predicted the shift away from using cash would be lasting. “I think very few shops will go back to actually offering cash services. Supermarkets’ staff wouldn’t handle it. They don’t want to touch cash anymore,” he said on a NAB podcast.