More than half of Australian first home buyers think all banks are the same, according to a study from research firm YouGov.
The findings showed that 57% of first home buyers believed banks were basically all the same. The same percentage also found financial matters confusing.
With over 1.8 million Australians expected to purchase their first home in the next 12 months, the study also found 82% found the idea of being in debt stressful.
Digital experience consultancy Mobiquity, which works with banks including Citi, Bank of Sydney, and ME Bank, said more than one millions Australians are set to make the choice for a new home loan in the next year, so lenders need to rethink their competitive strategy.
"For banks to stay ahead of the competition in their lending services, they will need to innovate with differentiated digital experiences that solve real customer problems and build these into their offerings to keep pace with evolving customer expectations,” said Mobiquity APAC general manager Gustavo Quiroga.
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Non-bank lender Wave Money founder and managing director John Flavell (pictured) said it was drummed into Australians as children that owning a home in Australia was a good thing to do.
“Speak with a broker as early as possible in the process to build a relationship with them so they can help you navigate buying a property,” Flavell said.
He said speaking to a mortgage broker is always a great start for somebody who is starting their new home journey.
“Brokers are incredibly valuable and are intimate with various government schemes in terms of grants and rebates. A broker will help a borrower navigate the complexity of matching their needs with solutions from their panel of lenders.”
Flavell’s advice for first home buyers is to time your purchase to market conditions.
“If you need to wait six, 12, 18 months before you can access the market do not fret, the expectation is you will have this home for many years,” he said.
“What we have seen with people trying to get into the market with prices that have escalated, accessing finance is becoming more difficult. The ability to achieve that objective is moving further away.”
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A recent Australian Banking Association report on consumer banking trends revealed Australians had adapted quickly to the digital era of banking, with more than one in three Australians with smartphones now using a digital wallet.
“When you think about the first-home buyer mindset, they have never experienced the journey associated with a mortgage product. They are therefore making direct comparisons to that of their current banking experience,” Quiroga said.
“To this end, lenders must reassess their customer journey and seek ways to enhance the experience in the same vein that day-to-day consumer banking services have evolved. Only when digital services have utility and provide a true value-add for the customer will lenders be able to take the high road and break away from being generalised alongside competitors.”