Accenture Banking Blog

Accenture’s ground-breaking 2019 Global Financial Services Consumer Study has seen four mindsets emerge from the data: Pioneers, Sceptics, Traditionalists and Pragmatists. In this series of blog posts, we’ll look at each type in the Australian context.¹

The global view

As you might expect, Pioneers are typically younger than the average respondent (globally, half are aged 18–34), ethically conscioussaying that a brand’s social responsibility efforts affect their choicesand almost invariably tech-savvy.

Read the report

They also tend to earn a good wage and trust their financial services providers, but are also far more likely to open new accountsand even to switch their main bank altogetherwith 13 percent doing so in the past year.

Pioneers are the closest of the four mindsets to the classic millennial stereotype. In practice, that means they don’t stick to the traditional ways of doing things. Instead, they are unusually open to new products, new services and new ways of interacting.

All of this makes them an exciting play for financial services (FS) providers. So, how does this category fare in Australia?

The local view

While the Australian consumer market may be already perceived as relatively established compared to some peers in the Asia-Pacific region, it was still surprising to see just how low the proportion of Pioneers is in Australia, relative to elsewhere in the region: only 15 percent of the total. Across Asia-Pacific, every country surveyed (bar Japan, at 4 percent) has a far higher proportion of Pioneers. China, India and Indonesia, for example, recorded rates around 50 percentand this cuts across generations.

How can established players position themselves in terms of their business models?

What this means is thatfor now at leastfewer Australians than in many other markets are hungry for some of the flashy technological innovations that are being introduced elsewhere. This isn’t to say that this low ratio will stay the same (it almost certainly won’t), but it does mean FS providers should keep in mind that Australians in general are less enthused by the idea of disruptive innovations. That said, financial services innovations have a habit of rapidly becoming mainstream, and (so far) the big Australian providers have generally been able to cherry-pick from new ideas and adopt the best ones before their customer base can be tempted by new entrants.

It will be interesting to see whether this trend can last. Recently Australia has seen a boom in fintechs and digital-only banks such as 86 400 and UBank aimed at those with a digital-first mindset. These new offerings may spark increased interest… or innovation may continue to be stifled by a lack of strong consumer demand and a banking sector distracted by regulatory concerns.

An exciting persona, but be aware

We said that FS firms view the Pioneer category as an exciting group. And they certainly are, butas we caution our clientsthere are two good reasons why it’s unwise to focus solely on them:

  • First, Pioneers are just one part of the whole, and in Australia they are far less prevalent than the other three mindsets.
  • Second, although Pioneers are happy to experiment with new offerings, they’re also willing to move elsewhere if you don’t get that offering right the first time. With Pioneers, you may not get a second chance.

This raises important questions for both full-service and digital banks. For example, how can established players position themselves in terms of their business models? And how much of a relationship can a provider build with a Pioneer customer base, given the willingness of this group to move elsewhere for a better deal? In both cases, identifying mindsets, like our survey does, can prove useful in considering various initiatives. For example, by providing insight into how to better target a digital-only offering, or to assess the feasibility of a new set of relationship-based banking products.

This type of approach can also reduce the risk of overlooking a segment of a bank’s customer market. Consider this: Pioneers are the closest fit with the typical idea of the ‘millennial customer’, making them the obvious target for digital banks, but there are still many times when even these most tech-savvy of consumers seek a traditional banking experience. Pioneers are, after all, the youngest of the four mindsets, and are therefore in the greatest need of guidance in certain product areas, such as mortgages. A lack of personalised, human guidance for Pioneers seeking home loans could well be a missed opportunity, yet it’s something that’s a deliberate, accepted feature of some business models, where ‘digital-first’ has become ‘digital-only’. Perhaps this need for human advice explains why Pioneers are more common in the 25–34 age bracket than amongst 18–24-year-olds who have less experience of financial decision making?

Digitised, personalised advicewith human support when truly neededseems like the way forward, especially for a younger customer needing some expert guidance. Fairly or unfairly, the ‘smashed avocado’ generation is notorious for struggling to save and manage money effectivelyand new products such as CommSec Pocket and Up are using Pioneer-friendly tactics to help young Australians do just this.

Better money management is just one of many areas that Pioneers would be excited to get their hands on. While the Pioneers only comprise 15 percent of the Australian market, they represent great opportunities for players who are willing to deliver a personalised, differentiated digital experience.

1You can learn more about this in episode 14 of our podcast series on Embracing Tech in Financial Services: How Well Do You Really Understand Your Consumer? 

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