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Mybudget
Reflecting 20 Years of MyBudget
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By Tammy Barton

Imagine a world where, in your pocket, you had instant access to your exact financial position and future outlook, with all your bills, expenses, savings and goals mapped out before you. Make a change to your budget and see your short and long-term projections change before your eyes. Don’t worry about setting aside savings or paying bills manually — it gets done directly from your budget. Got a question? Call or message your support team for advice.

This isn’t the future, it’s MyBudget right now.

We've come a very long way from my kitchen table where the company first started in 1999. Back then, I was managing a handful of people's budgets, talking to their creditors and going to the post office to pay their bills for them.

In celebration of MyBudget’s 20th anniversary milestone, we recently conducted a survey of everyday Australians about their current financial commitments and attitudes toward money in 2019 versus two decades ago. In this article, I’ll be sharing some of our survey findings, reflecting on the 20 years that was, and envisaging what the next 20 years and beyond may hold.

Four out of five Australians are stressed about money

Survey respondents overwhelmingly agreed that life today is hectic. Eighty five percent said life is more expensive and 75 percent said life in general is more stressful than it was 20 years ago. Almost one in three respondents (33 percent) said they are worried they’ll never pay off their mortgage, with home loan repayments, ongoing bills and daily living expenses identified as the financial commitments causing greatest stress.

Looking at these statistics, I’m concerned but not shocked. Two decades ago, the average mortgage accounted for around 10 percent of household income, and that’s now about 30 percent. I remember buying my first house in 1998, with the interest rate being just shy of seven percent. I split my home loan into two parts:  half at a fixed interest rate and half at variable. Shortly after, the interest rate climbed even higher!! 

I note, however, that my high loan costs in 1998 were offset by lower relative house prices. As well as sky-high house prices, in the past two decades there have been huge spikes in the cost of services such as utilities and insurances, alongside stagnating wages. Money pressures are clearly playing a big role in increasing life stress.
 

What’s changed in the financial services industry in 20 years

In 2019, more Australians have a credit card (53 percent) than a superannuation account (50 percent) or a mortgage (31 percent).

Cards are the new cash. Do you remember having to borrow coins from your friends or find enough change buried between your car seat to buy a snack from a vending machine or to feed a parking meter? Most, if not all, consumer services now accept cards. The reality is that people rarely carry cash anymore, and for merchants and service providers, cashless transactions are easier to process. 

Technology has also come a long way in the last two decades. The financial services industry is a leader in technology adoption, driven first by Internet banking and new innovative credit products like Afterpay, transactional services such as PayPal, and the advent of digital wallets, biometric security and ‘tap & go’ payment methods, such as Apple Pay for iPhones.

The digital age has, in many respects, made everyday financial tasks simpler. Information and money is easier to access and move than it was 20 years ago. On the flipside, however, technological distraction, information overload and the convenience of frictionless transactions can contribute to overspending and increase financial anxiety.

How the customer experience has changed

The survey revealed that women are more stressed than men about their financial commitments (22 percent vs. 15 percent). Women were more likely than men to agree with negative statements such as ‘I’ll never pay off my mortgage’ and ‘Managing money is more stressful now than it was 20 years ago’.

This is further evidence that Australia cannot afford the financial burden of the gender pay gap, which has barely shifted in 20 years. We also can’t afford to keep letting women bear the ‘mental load’, including often taking full responsibility for managing household finances.

While well-over half (58 percent) of respondents say that managing money is more stressful now than it was 20 years ago, the same number agree that technology has made it easier to manage their money.

The financial services industry has come a long way, but I believe it needs to become even more focused on personalised money management that is supported by user-friendly technology. Customer loyalty will be won or lost on this. Customers are no longer content to receive homogenised mass marketing from their bank. Nor are they interested in historical reports of their bank balance. They want up-to-the-minute customised financial data so they can actively improve their financial fitness level. 

The profile of clients coming to MyBudget in recent years reflects this change. When MyBudget began, we primarily supported people in serious financial hot water. We still do that, but today many clients just want the convenience of having someone trustworthy to manage and maximise their money. 

With the ability to access information now made simpler, clients today are accustomed to seeking services that are omni-present -- a service they can contact at any time, on any device, and in the preferred method of their choosing, voice, text, instant messaging, email or social media.

Where is the finance industry heading and how can it adapt?

The financial services companies that can make the cultural adaptation towards tech-enabled customer centrism will be our future industry leaders. Those that don’t make the transition, or who cling to the idea of putting the institution before the customer, will fall behind. The future’s leading financial services organisations will position themselves, not as mere service providers or profit makers, but as suppliers of tools, knowledge, information and technology to equip the global financial fitness movement. Rather than a vision myopically focused on shareholders, their focus will be on a financially healthier world.

One example of this is the need to replace the traditional historical monthly bank and credit card statements with more ‘live’ or frequent reporting by embracing technology to influence positive daily financial fitness health habits, in much the same way that the physical wellness industry is being led by wearable fitness devices and instant reporting.
 

How I foresee things 20 years from now with banks and fintechs

I believe banks and fintech organisations, such as MyBudget, will increasingly work together for the betterment of the client. The aim will be to provide a seamless experience for clients, with real time access to their financial data, enabling them to make good financial decisions on the run. I believe that what is now a competitive relationship between traditional banks and fintech companies, can be transformed into a harmonious marriage. Traditional banks would have access to new revenue streams, and fintechs would be able to reach a wider market with the innovation and technology to deliver exceptional and personalised client experiences.

For MyBudget, predictive analytics will provide our clients with the help they really need when they’re most receptive to hearing it. Clients will expect to be ‘in the know’ seamlessly, across channels, in real-time, and they will expect us deliver up-to-the-minute financial information direct to their personal devices. This will also redefine client-facing roles and what it means to provide customer support. I believe that there will be more, not less, opportunities for high-touch services such as MyBudget. That’s because money has a strong emotional component and customers will continue to seek human support and counsel.

How MyBudget is future-proofing itself

For MyBudget, a dedication to consistently delivering a quality client experience will be key.
We will continue to recruit and develop a team that genuinely cares and is sincere about making a difference in our clients’ lives. We are also building a world class technology team that integrates with our world class service delivery team. 

Technology can easily take away the human connection and reduce face-to-face interactions. At MyBudget, however, person-to-person communication is considered vitally important. We remain committed to maintaining our Australian-based client care team. 

Just as technology is evolving rapidly, so too is the client. We want to create loyal clients who are brand advocates. Thanks to the mountain of data available to us, we can better anticipate and surpass our clients’ needs and expectations. We are also lowering costs by using technology to simplify and eliminate clunky and costly processes. In the future, we will be able to connect with clients in ways that are superior and less expensive.

The key to future-proofing, however, is not with technology, but with purpose--staying true to a mission that changes lives. Our Big Hairy Audacious Goal (BHAG) at MyBudget is to eliminate financial stress in the community and improve the financial health of the entire world. In other words, we want to make the world a better place, and this massive stretch goal motivates everything we do.

If you want to read more about our survey results, you can download our 20 Years of Money Report here.
 

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