While William and Kate welcome their baby in April 2015, the real news for financial nerds like us is the birth of new banking products.
So to find out what lies ahead for banking in 2015 (and beyond), we gazed into our crystal balls and as the mist began to clear, we saw…
1. Fingerprint banking
Do you constantly forget your PIN number? Then fingerprint banking technology could be in your future. Using fingerprint recognition software, it allows you to make purchases at the shops or login to your mobile bank app on your smartphone using (you guessed it) your finger.
In the US fingerprint payments, also known as biometric payments have already begun in the place of a credit or debit swipe. A shop assistant scans your index finger on a terminal authorising the transaction.
In Australia fingerprint banking is still in its infancy. Westpac is leading the charge with its Westpac Live Fingerprint login, which will be available from January next year. Its Touch ID technology lets you login to your mobile banking app by pressing your finger against the phone and will be available for iPhone 5S, iPhone 6, iPhone 6 Plus, Android Samsung Galaxy S5 or Note 4 customers.
2. Cashless society
“Sorry we only accept cash” will become a catchphrase of the past. The Commonwealth Bank has predicted a cashless (even cardless!) society as near as 2020.
We can thank a new technology called a mobile wallet, or more commonly dubbed a digital wallet, which replaces your entire wallet and let’s you make purchases with your smartphone by using the same near field communication technology as payWave and PayPass.
To see which providers are offering this innovative technology, read our in-depth digital wallet guide here.
3. Fairer credit and debit surcharges
If Financial System Inquiry Chairman David Murray has his way, Aussies will be gleefully farewelling rip-off credit and debit card surcharges, as the Financial System Inquiry is calling for a ban on pricey surcharges at the checkout. Instead suggesting a fixed percentage cap, which means merchants would no longer be able to make a profit by hiking up surcharges for credit and debit card transactions.
4. Peer to peer banking
Strangers helping strangers – a simple yet revolutionary idea that brought peer to peer lending to life. P2P platforms have been around for a while in the US and UK and work by removing the banks from the borrowing equation, allowing individual investors to lend directly to credit worthy borrowers.
The first wave of peer to peer lenders (SocietyOne, RateSetter and ThinCats) are now operating in Australia but we expect more to come and expand into other areas, such as savings, investing and possibly even travel money. So watch this space…
5. Supermarket banking
Would you like a home loan with your lettuce? If Australia follows in the UK’s footsteps, where major supermarkets Tesco, Sainsbury’s and ASDA offer banking services from pet insurance to personal loans, we could see the Big Four in Australia turn into the Big Six.
Woolworths and Coles have already entered the financial services sphere with their own credit card and insurance products, so will we see these supermarket giants take the plunge and get their banking licence in 2015?
6. Ethical banking
Most of us probably don’t give a second thought to what the banks are doing with our money but with social responsibility and grassroot movements gaining traction worldwide, ethical banking will become more mainstream.
Organisations like australianethical.com.au highlight ethical issues in the banking world and the fact many banks are investing in activities like coal mining that have a negative impact on the environment.
So far Bankmecu is the only Australian financial provider listed on the Global Alliance for Banking on Values due to its goGreen home loan and personal loan products. As Aussies become more environmentally engaged, we’ve put it on our list of growth areas for banking in 2015 and beyond.
7. Super access for first home buyers
Are you a first home buyer struggling to enter the booming property market? Then you may be interested in a new proposal, which gives first home buyers like you access to your superannuation.
The idea was headed by Independent South Australian Senator Nick Xenophon over 2014 and was inspired by the Canadian Home Buyers’ Plans scheme that allows first home buyers to use $25,000 from a “registered retirement savings plan” towards a first home deposit.
8. Interest rate movements
The Reserve Bank of Australia has left the official cash rate at a steady 2.5% for the 16th consecutive month over the Christmas period. While some experts are talking about a rate rise in 2015, the Mozo team predicts rates will drop even further in 2015 to help push down the Australian dollar, which would support the business sector and employment.
In 2014 we saw the first signs that short term introductory rates could be coming to an end. With financial providers ING DIRECT and UBank introducing a high ongoing interest rate for customers who link the provider’s everyday bank account with its savings account. We predict bundling banking products could become a new trend in 2015.
Read Mozo’s Bundle or no saving bonus blog for a full rundown on the new bundling innovation.
10. Products with rewards attached
Rewards lovers can now earn points on everything from their home loan to credit card, even their everyday bank account with the Bankwest Rewards Transaction Account, which earns you 1 point per $100 on your account balance every day and 10 points on overseas shopping online.
While credit cards are where the bulk of rewards programs are found, currently there are a handful of provider’s offering home loans, personal loans and bank accounts with rewards points attached. Our crystal ball indicates more will come in the next few years.