Australian Retail Deposits: Forecasts and Opportunities

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Jul 31, 2017, 13:29 ET

LONDON, July 31, 2017 /PRNewswire/ -- Summary
Retail deposit market in Australia has had years of strong growth, surpassing AUS$1TN for the first time at the end of 2016. Growth is slowing in the market as under-employment, low wage inflation, and low APRs have taken their toll, and these factors will continue to constrain growth in the near future. Sharper targeting of those consumers with the fastest growing deposit values, such as the over-65s, is therefore required to ensure adequate funding of retail banks' balance sheets.

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Key points to include -
- Fee income from accounts has fallen in recent years, though total banking fees charged to households have stagnated.
- Retail savings and investments are dominated by deposits, and this trend is not expected to change.
- Much of the growth in deposit values has been driven by instant-access products, as the interest rate premium on term deposits has narrowed.
- Older, mass affluent households remain the mainstay of the market, despite a more diversified portfolio.
- Account switching is largely confined to the millennials market.

Critical success factors
- Ensure savings products are easy to access: The trend in savings products clearly favors instant-access savings products. Australians simply demand higher APRs to lock away their money in term deposits than what the market is currently providing. It will take some time before interest rates and the spread between instant-access and term deposits reach a level that makes locking away money for any term attractive.
- Growing retail deposits requires targeting growth demographics: Older consumers are more difficult to entice but remain the primary pool of retail deposits in Australia, and one that is growing as the country ages. Increasing market share will require appealing to these cautious consumers with messages of stability and reliability, as these deposits represent the liquid element of their retirement savings.
- Do not underestimate the potential for P2P lenders: Although few Australians are eager to invest via peer-to-peer (P2P) lenders, the concept has good traction among younger consumers, particularly millennials.

The report "Australian Retail Deposits: Forecasts and Opportunities" examines the retail deposit market in Australia, analyzing how market forces will influence customers' ability and willingness to save, what impact new products, innovations, and strategies will have on the savings market, and consumer attitudes towards saving and personal finance.

Companies mentioned in this report: Commonwealth Bank of Australia, NAB, ANZ, Westpac, Bankwest, St.George Bank, Suncorp, ME Bank, CUA, Macquarie Bank, HSBC, ING, Citibank.

Scope
- Fee income from accounts has fallen in recent years, though total banking fees charged to households have stagnated.
- Retail savings and investments are dominated by deposits, and this trend is not expected to change.
- Much of the growth in deposit values has been driven by instant-access products, as the interest rate premium on term deposits has narrowed.
- Older, mass affluent households remain the mainstay of the market, despite a more diversified portfolio.
- Account switching is largely confined to the millennials market.

Reasons to buy
- What are the factors that will affect the savings market in 2017 and beyond?
- What strategies will be most effective in attracting new retail deposits?
- Which new savings innovations are being introduced to the market?
- How much of an impact will regulatory developments have on the operation of the Australia deposit market?
- How will consumers' desire to increase their savings interact with a challenging economic climate?
- How will the latest consumer behavioral trends affect the products demanded in the retail savings market?
Download the full report: https://www.reportbuyer.com/product/5026557/

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