Seven in 10 Australians claim their relationship with their banks has remained unchanged five years after the conclusion of The Royal Commission into Misconduct in the Banking, Superannuation, and Financial Services Industry, a new report from Publicis Sapient, the 'Customer Banking Report 2024', has revealed.

The report, which surveyed over 5,000 Australians, provides a comprehensive overview of customer expectations, experiences, and perspectives of the country's banking sector. According to its findings, 74% of Australians expect banks to offer personalised services and conversations, associating these expectations more with physical channels than digital ones. However, there is a clear demand for improved digital banking, with 49% of customers wanting enhancements, particularly in customer service.

AI was also in the spotlight. While 58% of Australians believe Artificial Intelligence (AI) will improve the level of service from their bank, a significant 96% express concerns about banks using AI. The strongest concerns about AI use in banking are a preference to speak with a person (58%), fear of job loss (54%), and data security and privacy (49%).

Despite the recommendations of the 2019 Royal Commission, 56% of Australians do not see any changes in how their banks operate. More than eight in 10 can identify a positive trait of banks, while 69 per cent can identify a negative one - the top being banks are expensive (37%) and unaccountable (23%).

In addition, the report looked into bank services and revealed 72% of Australians had visited a bank branch in the past six months, and 70% are not in favour of eliminating cash services from branches. That's because three in four are still carrying cash even as 53% say they prefer using mostly cards.

The report also highlighted the importance of banks providing support to customers in financial stress. More than nine in 10 (92%) of Australians expect their banks to provide support before it's too late, and 98% want their bank to assist them if they were to fall victim to financial scams.

Security was another area explored in the report. The good news is most consumers surveyed are confident in bank security and scam prevention measures and 98% expect support if they fall victim to a scam. Yet only 58% said they felt their bank was helpful in providing assistance when they were exposed to a scam, with slow response times a notable bugbear.

"Australian banking is at a crossroads, where the ability to adapt, innovate and deliver a seamless customer experience will determine the market leaders of tomorrow" said Tales Sian Lopes, Head of Financial Services, Australia & New Zealand, Publicis Sapient. "All consumers want is the basics done brilliantly, but with customers associating this with branches at a time when most banks are cutting their physical footprint – data and digital experience are the battleground of the future."

Lopes also flagged the ethical issues with banks bringing in more AI to services.

"One of the key challenges facing Australian banks is harnessing AI as an enabler to support the delivery of the personalised services that people are increasingly demanding whilst also showing customers that they are engaged in the safe and ethical application of these fast-emerging technologies. There is an enormous opportunity for banks to proactively design a better customer experience," Lopes added.

Publicis' report also found 75% of Australians support a bank that is committed to green initiatives and providing green products, indicating a shift in customer expectations towards more socially responsible banking.

"For Australian banks, enhancing accountability and trust while demonstrating societal benefit is now more critical for customer retention. With the cost-of-living crisis impacting Australians’ financial wellbeing, banks would do well to build a comprehensive toolkit of financial wellbeing intervention techniques, which they can deploy proactively when the data suggests customers are at risk of falling into financial stress," Lopes commented.

"At the same time, younger Australians are also more discerning about social responsibility. Banks should be thinking beyond existing products and business models towards social and environmental options as a long-term growth strategy."