While Australians have, to some extent, been negatively affected by the COVID-19 (Coronavirus) pandemic, some are faring better than others when it comes to their financial security. Working from home arrangements and fewer opportunities to spend discretionary income are arguably enabling Australians to bolster their savings at a faster rate than ever before, says MyState Bank.
On the other hand, many Australians are also facing financial stress, with half of the population reporting that they would not be able to afford a $200 increase in monthly household expenses in the latest research from bank.
The survey of over 1,000 Australians commissioned by MyState Bank found that almost four in 10 (38%) Australians did not have an emergency fund before the outbreak of the Coronavirus pandemic. Meanwhile, a third of Australians (33%) have been forced to dip into their savings to get by since the outbreak of Coronavirus.
Of those who admitted to drawing on their life savings during this time, one in 10 estimate they have drained more than half of their savings.
MyState Bank General Manager, Customer Experience, Heather McGovern said that despite financial hardship assistance on the table from the Government and banks, many Australians are still struggling to manage their finances.
“What started out as a health crisis has been felt in the hip pockets of many Australians across the country. While lockdown measures have helped some Australians into a better financial position; for others, it has left gaping holes in their household income.”
Almost one-fifth (18%) of those surveyed reported that the economic implications of COVID-19 have seen their household income decrease by more than a quarter.
“With financial support from the Government winding back in September, many Australians are likely to feel the pinch even more. As a bank we recognise the need to help our customers stay financially healthy during this time,” said Ms McGovern.
According to the research, paying for essentials such as groceries (39%) and paying for household bills (39%) are the biggest reasons why Australians are dipping into their savings during this time.
Commenting on these findings, Ms McGovern said, “The economic implications of COVID-19 have caused many households across the country to redirect their savings to the basic necessities, shelving their big financial goals and decisions, at least, for the time being.”
Almost a quarter of those needing to access their savings (23%) reported those savings were originally being put towards a deposit on a first home, while one in five said the savings were going towards their retirement. A further 25% of respondents were intending to put the savings towards a holiday.
Furthermore, more than four in 10 Australians (41%) expect their finances to continue to be affected in the next six to 12 months by the Coronavirus pandemic.
New AI-driven technology helps customers reduce financial anxiety
To help customers better manage their finances in these uncertain economic environment, MyState Bank has launched a new AI driven banking solution which is in-built into its everyday transaction and savings account products*.
The AI-driven banking solution harnesses transaction data, predictive analytics and artificial intelligence to proactively offer customers insights and advice to help the understand and better manage their spending, and save more easily. Practical services in the new tool include:
Accessed via the MyState Bank mobile banking app and internet banking service, the solution can deliver each customer a comprehensive snapshot into their income and spending habits. The tool can immediately recognise and understand small and immediate changes in customer patterns such as deposit delays or balance issues.
“These are challenging times and many customers are experiencing high levels of anxiety. We believe we can play a real role in helping customers with their day to day money management, get on top of their finances and ease their financial stress,” said Ms McGovern.
“MyState Bank has long believed that a personal approach is key for our customers. This new tool is a truly personalised service that uses customers’ own data in a way that helps them get ahead and plan for the important things in their lives.”
Notes on research:
Nationally representative survey conducted by Pureprofile of 1,008 Australians between 1 and 4 June 2020.