In today's era of ubiquitous digital technology, Australians are witnessing a significant transformation in the management of their personal finances. The growing prevalence of digital financial solutions, driven by the convenience and accessibility offered by digital platforms, is redefining the way everything, from investment to credit score tracking, is approached. This shift towards digital is leading to a popularisation of online investing, budgeting apps, and stock trading, simplifying previously complex financial processes, and consumers and providers are facing a new landscape filled with opportunities and challenges.
Figure 1 - The digital solutions most used by consumers
Source: Adviser Ratings *Note: Excluding Detailed Budgeting, all digital solutions are growing year-over-year.
The trend towards automated investing is gaining momentum with platforms like Stockspot, Quiet Growth, and Pearler. These tools offer investors the ability to create diversified portfolios managed automatically, enabling them to leverage sophisticated investment strategies without the need for in-depth market knowledge. Through algorithms and advanced risk management models, these platforms seek to maximise returns and minimise risk for investors, offering an attractive alternative for those seeking a more passive and efficient way to invest in the stock market.
In addition to investing, digital solutions are also transforming how Australians budget and track their expenses. Budgeting apps and programs like ASIC's MoneySmart or more sophisticated ones like Finder App or Otivo are gaining popularity by offering intuitive features and powerful tools to help individuals take control of their personal finances.
Stock trading has also become more accessible thanks to online trading platforms like SuperHero or Stake. With just a few clicks, users can buy and sell stocks in global markets from the comfort of their homes. This has democratised access to financial markets and allowed more people to participate in the world of stock investment.
Another area where digital solutions are making waves is in credit score tracking. With apps like GetCreditScore, Credit Simple, and Credit Savvy, users can monitor their credit scores and receive recommendations on how to improve their credit profiles. This is crucial for those looking to apply for loans or mortgages in the future, as a good credit score can open doors to better interest rates and more favourable conditions.
Last but not least, neo-banks are changing the way Australians interact with their financial services. These fully digital financial institutions offer a frictionless banking experience, with user-friendly apps, savings accounts with competitive rates, and innovative money management tools. This has led to an increase in neo-bank adoption among those seeking an alternative to traditional banks.
Despite the growing use of digital financial solutions, a significant portion of Australians still do not utilise them. According to some estimates, nearly 70% of consumers do not use any of these tools. This lack of adoption may stem from factors such as awareness gaps, distrust, or a preference for traditional methods.
Figure 2 - Most valuable uses of digital solutions
Source: Adviser Ratings *Note: Consumers would start using digital tools primarily to track their income and expenses.
However, as digitisation continues to advance and these solutions become more sophisticated and accessible, we are likely to see an increase in their adoption in the coming years. This presents both challenges and opportunities for the financial industry, and those who manage to adapt to this paradigm shift will be better positioned to thrive in the digital future.
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