Tech driving Gen Y spending habits

 

23 April 2019

A growing number of younger Australians are rapidly adopting new payment technologies but are lagging in using money management tools to help control their spending habits.

The emerging trend was revealed in a new Bankwest survey focusing on the changing influence of technology in Australia’s two largest population hubs – Victoria and New South Wales.

Of the Gen Y respondents who used digital payments for everyday shopping, close to half (44.7%) did so for the majority of purchases, with 48.4% increasing their usage over 12 months.

Much of Gen Y’s adoption and spending trends came in their embrace of digital services, such as music (79.9%), ride sharing (60%), food delivery (59.3%) and video streaming (45.2%).

However, while young Australians reported strong use of banking apps (76.8%) and online banking (56.5%), fewer than one-in-five (18.7%) adopted tech tools to manage their spending.

The digital spend-trend came despite an almost unanimous belief from Gen Y respondents that tech made it easier to spend without thinking (93.5%) and spend money they didn’t have (90.1%).

The reliance on tech for making payments was not as present in the Baby Boomers generation, which placed the least amount of faith in tech for financial management.

Bankwest EGM Customer Solutions and Insights Pieter Vorster said the trend around spending was consistent with the adoption of emerging technologies, especially among younger people.

“When new innovations emerge, people often jump in quickly to integrate them into their lifestyles, but they don’t always consider where that can lead them,” Mr Vorster said.

“The silver lining, especially for young Australians, is quick adopters are also open to innovations to assist them, if money management tools are simple and easy to use.

“That’s where the supportive role of financial institutions is so significant, particularly through encouraging customers to use tools within their banking apps, which are popular with Gen Y.

“Banks have an opportunity to better connect their customers with these tools, such as payment alerts and credit limit adjustments, so they can use tech safely, while spending within their limits.

“Customer needs are changing rapidly, and we need to ensure we’re working to protect and enhance customers’ financial wellbeing as they adopt these emerging technologies.”

 

Survey findings

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   Gen Y (%) Gen X (%) Baby Boomers (%) Overall (%)
Use a digital card on a smart device for everyday purchases 38.2 23.2 11.5 27.5
Of those digital card users, use for more than 50% of everyday purchases 44.7 37.4 39.9 42.6
Of those digital card users, use for everyday purchases has increased in past 12 months 48.4 42.4 50.0 47.3
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Tasks for which an app or Smart Home Device is typically used
   Gen Y (%) Gen X (%) Baby Boomers (%) Overall (%)
Music 79.9 57.1 44.6 64.9
Weather 71.0 62.6 66.2 67.6
Banking 65.3 51.2 42.3 55.7
Ride-sharing 60.0 31.5 22.7 43.1
Take-away food 59.3 39.0 23.5 44.9
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Method of financial management
   Gen Y (%) Gen X (%) Baby Boomers (%) Overall (%)
Banking app 76.8 60.2 51.5 66.0
Online banking 56.5 56.7 68.5 59.6
Pen and paper 22.0 25.2 25.4 23.7
‘Notes’ on phone 20.5 10.6 9.2 15.1
Spend-tracker app 18.7 6.3 4.2 11.8
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   Gen Y (%) Gen X (%) Baby Boomers (%) Overall (%)
Technology has made it easier to spend without really thinking about it 93.5 89.7 85.0 90.4
Technology has made it easier to spend money you don’t have 90.1 85.8 78.1 85.9
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About Bankwest
Bankwest provides personal and business banking solutions for more than 1.1 million retail and business customers across Australia. Bankwest customers enjoy access to an extensive network of stores and business centres, direct and third party distribution channels, agencies and electronic banking facilities, as well as 24-hour telephone and internet banking. Bankwest is a division of the Commonwealth Bank of Australia.

About the report
This data contained in this release was captured as part of a wider survey conducted by Bankwest. Research was carried out by CoreData via an online survey of Victoria and New South Wales residents. The survey was designed, with input and approval from Bankwest, prior to fieldwork commencing. All fieldwork was conducted from 5-11 February 2019. CoreData was responsible for distributing and hosting the survey, which was sent to Victorian and New South Wales residents between the age of 18 and 70. A total of 1,001 responses were completed.

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