From wearables to personalised interest rates, we’ve seen some pretty awesome changes to banking in 2018.
But with the new year right around the corner, many sectors of the banking industry have already started gearing up for even bigger changes, from credit cards to foreign exchange.
So if you’ve been too busy to catch up on all the details, we’ve got the five banking changes you won’t want to miss in 2019.
New credit limit regulations
From January 1, banks and credit card providers will employ a new system to determine appropriate credit limits for customers who are either looking to take out a new card or bump up their credit limit.
In an effort to enforce responsible lending, providers will now assess whether a customer would be able to pay off their balance within three years.
With outstanding credit card debt hitting an eye-watering $45 billion, ASIC believes this new system will ease the “financial difficulty” felt by many Aussies.
The regulatory body has already provided guidelines to credit card providers on how eligibility is to be determined, which includes looking at fees and interest rates.
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Energy price changes
While Aussies across the nation welcome in the new year, those in Victoria will be kicking off 2019 by checking their energy bills thanks to the annual January 1 price updates.
Last year, the highest price hike reached as high as 16.20% - adding $69 to the average household quarterly bill.
But for the rest of the country, they’ll have to wait until July 1 to find out whether their energy retailers will hike prices.
And although there’s no predictions as to which way the energy market will turn, Aussies in Victoria can get ahead of the game now by making the switch to a better value energy plan.
Default energy pricing is also something Aussies could find worth keeping an eye on 2019. In October, the Australian government submitted a formal request to the Australian Energy Regulator (AER) to introduce a ‘default market offer’.
According to Energy Minister, Angus Taylor, default energy pricing will protect loyal customers from potentially being exploited by energy retailers.
The Australian Energy Regulator (AER) are expected to deliver a maximum price for a default market offer by April 1, which will then apply on July 1.
UPDATE: APRA ditches interest-only cap
Previously it was enforced to promote responsible lending and now the Australian Prudential Regulation Authority (APRA) feels it’s no longer needed.
From January 1, lenders will no longer be required to keep interest-only investor loans below 30%.
The regulator stated that authorised deposit-taking institutions (ADIs) had provided assurance over the quality of their lending standards.
But according to APRA, the cap was always meant to be a temporary move in order to restore the market.
ACCC foreign exchange inquiry
If you’ve been keeping up with finance news this year then you would have found it hard to miss the huge backlash big banks received during the Banking Royal Commission.
But in 2019, big banks will continue to remain in the hot seat, thanks to an ACCC inquiry that will look into the foreign exchange industry.
Some of the areas the ACCC will investigate include how big banks and other major providers justify charging high prices, as well as how those prices are presented to customers.
And while there is no predicted result thus far, Matt Hayja, Head of Foreign Exchange Products at Citi believes that the inquiry will create a more competitive market for customers.
The ACCC is expected to deliver its findings to the Treasurer in May 2019.
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Government funding for small businesses
Early next year, approximately three million small businesses around Australia are set to reap the benefits of two new initiatives proposed by the Liberal National Government that aim to improve access to funding for SMEs.
Around $2 billion will be made available to smaller banks and non-bank lenders, which could be passed on to small businesses as business loans, with more competitive terms.
The second initiative involves the development of a bank-backed Small Business Growth Fund in Australia to provide longer term equity funding to small businesses.
UPDATE: Online small business lenders to follow new best practise code
Online small business lenders will now be expected to follow a code that’s designed to give SME borrowers greater transparency in loan products. The Australian Finance Industry Association (AFIA) Online Small Business Code of Conduct outlines best practise principles when it comes to full disclosure and transparency with small business loans.
SME borrowers are expected to benefit from the code, as it will provide a clear loan summary sheet before the loan is accepted as well as a SMART Box - a tool that will help compare different online lenders and their loan products.
Open banking to be phased in
With major players and smaller lenders rolling out personalised interest rates and comprehensive credit reporting (CCR), it’s safe to say we are well and truly moving into a new wave of banking.
But by July next year, open banking will have officially been phased into the banking and financial industry.
Open banking refers to the sharing of consumer data across all financial services, like other banks, smaller lenders and non-bank lenders. Basically as a customer, you will have the power to share your data with any other provider you want and have the authority to negotiate the best possible deal for your financial products.
With all the banking changes starting in the new year, it might be time you thought about giving your own bank account an upgrade. Our bank account comparison tool compares a range of accounts to help find the right one for you, or you can check out some current offers down below.