COVID-19 has seen a sustained and permanent shift in customer behaviours. Our global research findings1 show that a new consumer is emerging – one that is financially constrained, more advanced in their use of digital technologies, more thoughtful and selective in their decision-making, and keen to see COVID-19 as an opportunity to reset values in the world.

Most notably we’re seeing:

  • The economic impact of COVID-19 will influence behaviours for some time to come. Australian customers in general are now more selective in their purchases (47 percent) than pre COVID-19, and value is the key purchasing decision driver for consumers. Across all sectors, 70 percent of Australian respondents rated value as important to their decision making. For Australian customers of banks this drops to just 57 percent, closely followed by customer experience (50 percent) and trust in the brand (49 percent).
  • The new consumer is digitally savvy and embraces the ease with which they can interact with organisations through digital channels. In Australia, 32 percent of banking customers who previously preferred face-to-face interactions now say they prefer using digital channels.
  • Consumers are increasingly purchasing from organisations they trust, at a time where trust is becoming more complex to build. At the start of COVID-19 banks benefited from an upsurge in trust as they stepped in to support the economy and their own customers (16 percent uplift for established Australian banks). Since May, however, this trust has been on the decline with now only 10 percent of consumers feeling like they trust their banks more than before.

What does the emergence of this new consumer mean for banks in Australia? And how should they shape their future channel strategies to meet these behavioural changes? We believe there are four key steps that banks should now take.


Brand and trust  |  Communication  |  Digital customer experience  |  Strategies

1. Maintain and enhance brand and trust

With trust in the brand being of heightened importance for bank customers1 – banking providers need to develop a sustained plan to maintain and enhance customer trust beyond their initial COVID-19 response.

Consumers have told us that banks need to focus on:

  • Societal responsibility: 96 percent of Australian consumers said they would be willing to pay more for goods and services where their spending has a noticeable impact on the local economy. For banks – careful consideration of the localised impact of physical network changes and customer’s perception of the bank’s support of localised recovery will take on greater importance.
  • Supporting vulnerable segments: 39 percent of Australian respondents highlighted this as being the most important thing that banks should be focused on nowB.
  • Improving digital security and user confidence: Driven by loss aversionA local consumers are placing greater importance on security, with 37 percent of respondents highlighting digital security and 38 percent seeking protection advice aimed at online fraud and scams as being critical focus areas for their banksB. Organisations also need to address the digital trust gap, as more than 30 percent of over-65 year old clients of Australian financial institutions do not have a high level of trust in digital channels3. As channel strategies shift, failing to address this will result in customer alienation (and churn) as well as misalignment of resources.

2. Build trust through open, simple and transparent communications

Proactive communications from their banking providers was ranked in the top three prioritiesB by 38 percent of Australian consumers. Customers continue to want simplified and clear communications from their banks. Organisations must continue to keep dialogues open with their customer base – and explain why decisions have been made, and why they are fair and reasonable. This approach saw them perform well in the early stages of the pandemic. As we move into dealing with hardship and vulnerable customers, communications to customers need to be clearer and more timely than ever.

3. Enhance digital customer experience and cross-channel integration

While past barriers have been broken down as use of digital has accelerated – we see an emerging risk of a behavioural snap-back as restrictions are eased, which may undermine the sustainability of the benefits realised. The scale of this will depend on how successfully providers achieve the following:

  • Seamless omni-channel: Customers have indicated that they are likely to use online services more if they can access multiple channels for different activitiesC 3. Investment in how banks make this happen for both new and existing digital adopters is critical.
  • Availability and convenience: Consumers of all age cohorts identify convenience (e.g. call-back options) and availability (e.g. 24/7 webchat) as being the two most important benefits from using digital channels – these design principles must be at the foundation of the bank’s digital strategy.

    Interestingly, a much higher percentage of under-40 clients of Australian financial sector businesses perceive quality of service/experience and personalisation as a key benefit of going digital compared with older cohorts – demonstrating the ever-increasing level of customer expectations for what digital channels will deliver3.
  • High value product digitisation: Our research into the Australian mortgage market highlighted that the mass affluent local banking customer shows a significant preference for online channels across the end to end journey (preference to perform the following online: 90 percent – research, 76 percent – servicing and 58 percent – application)2. As consumers become more comfortable with the use of digital channels to purchase high value products, banks need to invest in making these as convenient, personalised and secure as possible.

4. Reassess physical network and contact centre strategies

The cost benefits to an organisation of the digitisation of customer channels have long been propounded. At an aggregate level our research shows a decrease in intent to use branches to perform standard banking activities (65 percent pre COVID-19 versus 44 percent in the new normal)1. However, nuances exist that need to be understood specific to the customer base and segments. For example, our research shows:

  • For purchasing a high value product – the use of the branch both pre and post COVID-19 remains static at an aggregate age level (40 percent versus 42 percent respectively) for Australian banking customers. However, in the 25-34 age cohort this falls from 37 percent to 23 percent1.
  • For product enquiry – the use of the contact centre increases by 5 percent for Australian banking customers aged between 18-441.
  • 81 percent of 65+ year-old consumers of Australian financial services agree that they like to have access to telephone or face-to-face support in addition to digital channel options (compared to 66 percent of under 40s)C 3.
  • For mortgages, 30 percent of local respondents indicated they prefer to apply for a mortgage through the traditional branch channel. While this is down 15 percent since 2017 – it demonstrates the need for a physical network to service this requirement2.

While the market impetus to reduce physical footprint is well understood, banking providers need to transition with a well-planned implementation to avoid alienating (or even losing) certain segments. Banks should not forget the importance of face-to-face, or at least voice-to-voice engagement channelsE – which provide an ever-decreasing opportunity to build personalised and trusted relationship with customers.

We believe now is the time for banks to look at persistent shifts in consumer channel preferences and build on their actions taken during COVID-19. Providers should stay the course with their focus on digital, investing in capabilities that will compliment a leaner branch network – notably seamless cross-channel integration and high-value transaction digitisation. Failure to do so provides an even greater opening for challenger and digital-only banksE to entice Australian customers to a more valuable proposition.


A.    ‘Loss Aversion’ is the tendency is to act to avoid losses, rather than capture gains.

B.    Thinking about you as a customer, what type of things do you think that banks should be focusing on now? Prioritisation of vulnerable customers and key workers (39%), Provide digital security to protect my account(s) (37%), Advice to avoid online fraud and scams (38%), and Proactive communications with regards to the effect of Coronavirus on their service offering (38%).

C.    Percentage proportion of consumers who rate each as important in their decision-making: 24/7 webchat (35%), Work across different devices (28%), Call-back option (27%).

D.    Anecdotally we have even seen organisations see an uptick in average call handling times across many contact centres – providing further evidence that customers still see a place for social and personal interactions with their providers, as long as this is at their choice.

E.    One in ten individuals are actively considering switching banks as a result of COVID-19, and of those, over half (53 percent) of Australian banking consumers are exploring digital bank alternatives1.


  1. Consumers and the New Reality (Australian Results), KPMG International, June 2020.
  2. The evolving mortgage market – Winning the fight for customers, KPMG Australia, 15 October 2020.
  3. Financial Services Customer Sentiment Research – Extracting key insights on financial services as a result of COVID-19, KPMG Australia, 8 July 2020.



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