Why don’t people switch banks? ACCC Retail Deposits Inquiry shines light on banks approach to deposit accounts; insights in ACCC Report influences Upworth to create ‘Savings Account Scanner’
THE FINTECH REPORT PODCAST: EPISODE 54: Alexandre Chavotier, Co-Founder & CEO, Upworth
According to Alex, the ACCC Report key points are:
Limited competition, interest rates not shown
Entry is hard
Product complexity (active pricing strategy)
Segmentation, price discrimination (introductory rates, bonus rates; ACCC report found 70% of account holders did not achieve the bonus rate)
Household deposits matter
Comparison websites
People generally don’t switch banks – why? Can CDR help solve this?
About Alex:
· Started career in investment banking in Europe before working at McKinsey and Quantum Black in Sydney
· Was at the forefront of McKinsey´s work in AI, including the development of a trading solution that secured internal VC funding
· Consulted to all the large Australian banks on an array of strategic topics and projects
· Came back to Australia 2 years ago to start Upworth after a 3-year stint in Mexico as right-hand to the Founder and CEO of ZeBrands, a successful scale-up comparable to Koala here (mattresses sold online)
About Upworth:
· Upworth is the wealth superapp.
· A one-stop-shop for personal finances where you can connect all your accounts to track your net worth, access unique and personalized insights and apply for financial products in a few clicks
In this episode we discuss:
1. ACCC Report – top 3 issues/key chapters (and Upworth’s interpretation)
a. Deposit accounts: limited competition, interest rates not shown
b. Many banks offer retail deposit products, but the sector is concentrated with barriers to entry and expansion; There are 4 major banks and 6 mid-tier banks which supply 89% of retail deposits, and a long tail of smaller banks supplying the remainder
c. Open Banking slow – why?
d. Chapter 7: Strategic pricing strategies lead to greater complexity for consumers and, for some, poorer outcomes – why?
2. Opportunities for Upworth?
3. How does it work?
4. What do users / customers need to connect? Eg bank accounts. And how do they do this?
5. Tech behind the new product? Platform, APIs, open banking, who do you partner with?
6. Results so far?
The FinTech Report