10 banking buzzwords to know about in 2021
In the world of banking, 2020 was a whirlwind. From three RBA rate cuts and the implementation of open banking, to the growth of some neobanks and fall of others, it can all be hard to keep track of.
So if you’re left feeling a bit confused about what’s to come in 2021, we’ve got you covered.
Here are our top 10 banking buzzwords you’re likely to hear more than once this year.
1. Historical RBA Cash Rate Cuts
Last year, the Reserve Bank of Australia (RBA) made three cuts to its official cash rate, leaving it at an historically low 0.10%. In response to the outbreak of the COVID-19 pandemic, the RBA made the rare decision to cut by 0.25% twice in March, and then most recently by 0.15% in November.
So what does this mean for 2021? These low rates are favourable to borrowers, as many home loan lenders have slashed rates - leaving some below 2.00%. On the flip side, this isn’t great news for savers as many deposit rates have also been dropped. So ultimately, it could be time to review your current financial products and shop around for a better deal.
2. Open Banking/Consumer Data Right
Still in its early stages, steps towards open banking were made in July of 2020. The introduction of Consumer Data Right (CDR) has been the most significant move in this space to date. CDR is an opt-in service which is managed by the Australian Competition and Consumer Commission (ACCC). It enables banking customers to share their data more easily with financial institutions (and eventually to energy and telecommunication providers as well).
As of November 2020, customers of the big four are able to access and share mortgage and personal loan information. From July 2021, customers from non-major institutions will be allowed to share account and transaction data across all banking products. This will make applying for new products easier and allow banks to create more personalised rates to suit you.
3. Comprehensive Credit Reporting
For Australia’s big four banks, comprehensive credit reporting (CCR) has been compulsory for just over a year. It is a system where these institutions must record both customers’ positive and negative credit information on their credit history. This was put in play to enable lenders to assess the risk of a potential borrower more thoroughly and accurately. Other large lenders are set to use CCR by the middle of 2021.
4. Responsible Lending
In 2020, the Morrison government announced that it intended to scrap responsible lending when issuing home loans and other credit products. This would allow banks and lenders to offer customer loans without a rigorous application process. The shift would mean the responsibility lies on borrowers instead of lenders when it comes to honestly disclosing income and spending information.
Additionally, the role of the Australian Securities and Investments Commission (ASIC) in enforcing responsible lending obligations would be reduced. In turn, it would free up ASIC to focus on regulating other areas like payday lending, consumer leases and other high-risk non-banking products (like introducing caps on interest).
5. Stamp Duty
During 2020, both NSW and ACT announced they will make moves to phase out stamp duty this year. And the Victorian government implemented discounts to stamp duty as part of its 2020-21 budget.
What is stamp duty? It is a type of tax that property buyers pay to the government. In the eyes of some state governments, phasing out or discounting stamp duty would allow more Australians to purchase a home.
6. Risk-based Pricing
Risk-based pricing refers to a system where banks and lenders offer customers a personalised interest rate based on their credit rating. Whilst this type of pricing has been around for many years, it is becoming more popular among personal loan lenders.
Not only does this form of pricing benefit those with a healthy credit history (as they receive a competitive rate), it also allows those with a worse credit history to borrow (at an appropriately higher rate). Throughout 2020, some lenders switched to this model - so there are plenty of options for these types of loans in 2021.
7. Refinance Home Loan
With many Aussies looking to bulk up their savings and pay off their existing debt in the wake of 2020, refinance mortgages are set to increase home loan activity. As mentioned, due to the three RBA cuts in 2020, there are some extremely low rates on offer right now. So if your home loan is currently sporting a hefty interest rate (anything above 3.00%), it’s likely time to make the switch.
8. Rewards Points
2020 was the year that Aussies bid farewell to international travel, leaving many people stuck on how to spend their credit card rewards points. While it is still not known when we might start travelling overseas again, it could be worth it to keep your points earnings going.
In some cases, your points may not expire meaning you have the freedom to wait until you can spend your points on flight. But on the other hand, if you do have a time limit on using your points there are other options, like domestic travel, online rewards programs stores and redeeming points for gift cards.
9. Buy Now Pay Later
Over the past five years, the Buy Now Pay Later (BNPL) industry has grown to become an extremely popular way for Aussies to pay for a number of different products. The industry has operated without much regulation, however in 2021 that is set to change.
At the end of last year, ASIC published a report on BNPL which outlined the regulatory changes that are in motion. These include design and distribution obligations (to come into effect October 2021) and the development of a Code of Conduct. While the details of the code are yet to be announced, it will provide the industry with an opportunity to address consumer harm.
10. Neobanks
The world of neobanks was a bit of a rollercoaster during 2020, as the effects of COVID-19 set in. While there were some new players and products that came onto the scene, a big change to the space was in December when Xinja announced it would be returning its ADI licence and discontinuing its banking products.
With both positive and negative changes happening in the space, it is definitely worth keeping an eye on in 2021.
Want to start the year off on the right banking foot? Why not check out these bank accounts below or head over to our bank account hub for even more options!
Compare bank accounts - last updated 19 March 2024
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Spend Account
$0.00
Apple Pay, Google Wallet, PayID, Samsung Pay, Fitbit Pay, Garmin Pay
0% p.a.
No monthly fees and no charges for overseas or online payments from ubank. Stay one step ahead with ubank’s spending insights and bill prediction. Apple Pay and Google Pay compatible. Deposits guaranteed up to $250K per customer.
CompareCompareSpend Account
No monthly fees and no charges for overseas or online payments from ubank. Stay one step ahead with ubank’s spending insights and bill prediction. Apple Pay and Google Pay compatible. Deposits guaranteed up to $250K per customer.
- account fee
- $0.00
- Payment Options
- Apple Pay, Google Wallet, PayID, Samsung Pay, Fitbit Pay, Garmin Pay
- interest rate
- 0% p.a.
- ATM networks
- none
- What kind of card?
- Visa Debit
- Interest rate
- Balances from $0: 0.00% p.a.
- Fee free transactions
- Unlimited eftpos, debit, ATM, and banking app transactions using internet banking or the ubank iOS or Android app.
Read our Mozo Review to learn more about the ubank Spend Account
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Mozo experts choice awards won:
- Travel Debit Card - 2023
Everyday Options
$0.00
Apple Pay, Google Wallet, PayID
0.01% p.a.
An easy, everyday banking account packed with flexible options to help you spend, budget & save better. $0 monthly account keeping fees & option to add up to 9 sub-accounts.
CompareCompareEveryday Options
An easy, everyday banking account packed with flexible options to help you spend, budget & save better. $0 monthly account keeping fees & option to add up to 9 sub-accounts.
- account fee
- $0.00
- Payment Options
- Apple Pay, Google Wallet, PayID
- interest rate
- 0.01% p.a.
- ATM networks
- Suncorp
- What kind of card?
- Visa Debit
- Interest rate
- Balances from $0: 0.00% p.a.
Balances from $1: 0.01% p.a.
- Fee free transactions
- Unlimited free transactions from own-bank ATM, atmx ATM, Big 4 banks ATM, EFTPOS, counter withdrawals, counter deposits, phone and internet
Read our Mozo Review to learn more about the Suncorp Everyday Options
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Orange Everyday
$0.00
Apple Pay, Google Wallet, PayID, PayTo
0% p.a.
The everyday bank account that could pay you for paying bills. Get 1% cashback on eligible utility bills (up to $100), $0 ING international transaction fees, and up to 5 rebated ATM withdrawals a month here or overseas (T&Cs apply)+ no monthly fees. Winner of the Mozo Experts Choice Awards 2023 for Exceptional Everyday Account.^
CompareCompareOrange Everyday
The everyday bank account that could pay you for paying bills. Get 1% cashback on eligible utility bills (up to $100), $0 ING international transaction fees, and up to 5 rebated ATM withdrawals a month here or overseas (T&Cs apply)+ no monthly fees. Winner of the Mozo Experts Choice Awards 2023 for Exceptional Everyday Account.^
- account fee
- $0.00
- Payment Options
- Apple Pay, Google Wallet, PayID, PayTo
- interest rate
- 0% p.a.
- ATM networks
- None
- What kind of card?
- Visa Debit
- Interest rate
- Balances from $0: 0.00% p.a.
- Fee free transactions
- Access 1% cashback on eligible utility bill payments (up to $100 per financial year), rebates on ATM fees for the first 5 fee incurring withdrawals (domestic). When you deposit at least $1,000 from an external bank account and make at least 5 card purchases using your ING debit card each month.
Read our Mozo Review to learn more about the ING Orange Everyday
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Everyday Global Account
$0.00
Apple Pay, Google Wallet
0% p.a.
No overseas ATM fees & up to 10 currencies in one account. Switch between currencies instantly 24/7 wherever you are using the mobile app. Receive 2% Cashback on eligible tap and pay transactions under $100. Mozo's Experts Choice 2023 winner for Exceptional Everyday Account.^
CompareCompareEveryday Global Account
No overseas ATM fees & up to 10 currencies in one account. Switch between currencies instantly 24/7 wherever you are using the mobile app. Receive 2% Cashback on eligible tap and pay transactions under $100. Mozo's Experts Choice 2023 winner for Exceptional Everyday Account.^
- account fee
- $0.00
- Payment Options
- Apple Pay, Google Wallet
- interest rate
- 0% p.a.
- ATM networks
- HSBC
- What kind of card?
- Visa Debit
- Interest rate
- Balances from $0: 0.00% p.a.
- Fee free transactions
- Unlimited free transactions from HSBC ATMs, EFTPOS, phone, internet, BPAY and direct debits
Read our Mozo Review to learn more about the HSBC Everyday Global Account
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Mozo experts choice awards won:
- Travel Debit Card - 2023
Carbon Insights Account
$0.00
Apple Pay, PayID, Google Pay
0.01% p.a.
An online-only transaction account with carbon insights available through the Suncorp App. $0 monthly account keeping fees & option to add up to 9 sub-accounts.
CompareCompareCarbon Insights Account
An online-only transaction account with carbon insights available through the Suncorp App. $0 monthly account keeping fees & option to add up to 9 sub-accounts.
- account fee
- $0.00
- Payment Options
- Apple Pay, PayID, Google Pay
- interest rate
- 0.01% p.a.
- ATM networks
- Suncorp
- What kind of card?
- Visa Debit or
EFTPOS
- Interest rate
- Balances from $0: 0.00% p.a.
Balances from $0.01: 0.01% p.a.
- Fee free transactions
- Unlimited free transactions from own-bank ATM, atmx ATM, Big 4 banks ATM, EFTPOS, counter withdrawals, counter deposits, phone and internet
Read our Mozo Review to learn more about the Suncorp Carbon Insights Account
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Glide Account
$0.00
Apple Pay, Google Wallet, PayID, Samsung Pay, FitBit Pay, Garmin
0% p.a.
Unlimited free internet transactions. Super fast transfers & use Apple Pay, Google Pay and Samsung Pay. No account keeping fees. Access Any Major Bank & MyState Bank ATM Fee-Free.
CompareCompareGlide Account
Unlimited free internet transactions. Super fast transfers & use Apple Pay, Google Pay and Samsung Pay. No account keeping fees. Access Any Major Bank & MyState Bank ATM Fee-Free.
- account fee
- $0.00
- Payment Options
- Apple Pay, Google Wallet, PayID, Samsung Pay, FitBit Pay, Garmin
- interest rate
- 0% p.a.
- ATM networks
- MyState
- What kind of card?
- Visa Debit
- Interest rate
- Balances from $0: 0.00% p.a.
- Fee free transactions
- Unlimited free internet transactions.
Read our Mozo Review to learn more about the MyState Bank Glide Account
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^See information about the Mozo Experts Choice Bank Account Awards
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