New research has revealed that one in four of the major banks’ customers have left or intend to move to a non-big four lender, resulting in around 4.9m Australians being on the financial move.
The data from comparison site Mozo also found 70% of Australians do not trust the big banks, something that half of the group attributed to the failure to pass on recent rate cuts.
“Australians are making it crystal clear that they are not impressed with the big banks, with 62% saying the big four are putting profits before customers,” said Kirsty Lamont, Mozo director.
“The days of bank profiteering are well and truly coming to an end with online and smaller banks offering ultra-competitive rates and minimal fees.”
The research indicated the “tide could be turning,” with half of those surveyed saying they’d consider making the move to an online home loan lender – a sector which currently holds just 6% of the population.
However, around 40% of those surveyed said they didn’t know enough to make the switch to an online lender, while over 30% communicated they felt a need to sit down with a mortgage expert to discuss their home loan options.
“It’s understandable that Australians are exhibiting a level of trepidation regarding applying for a home loan online, given it may well be the largest sum of money they borrow in their life,” said Lamont.
“That said, an online lender can easily save [a borrower] tens of thousands of dollars over the course of their loan, as well as offering the same level of security as any major bank.”
The big banks’ “sluggish response” to recent rate cuts has most negatively impacted the trust of those aged 25-34, which is also the age group most likely to swap financial providers, with 46% saying they intend to do so.
“Only 19% of Australians believe the big banks are doing what is necessary to stay afloat in the wake of the rate cuts. The writing is on the wall for many borrowers, and now is the time to find the most competitive rate on the market and reap the rewards,” said Lamont.
