We take a look at some of the key finance trends of 2020 to keep you ahead of the game. Here’s what you can expect to see this year.
Shopping around for a better mortgage rate
Banks putting profits before people? It’s nothing new and we shouldn’t be surprised. But a blatant example occurred mid last year when two major banks declined to pass on the full RBA cuts to their customers.
Treasurer Josh Frydenburg says he finds the move “deeply disappointing” and that actions like this don’t give the Australian people any comfort that the banks have changed their behaviour. Even RBA governor Philip Lowe advised people to, “go and look for a better deal somewhere else”.
How does this impact you?
If you’re looking to refinance, then now’s a good time to shop around as you could save thousands on your current mortgage. Consider smaller lenders as well as those of the big 4 banks that have passed on the RBA cuts.
Increase in housing demand and rise in prices
The rollout of the First Home Loan Deposit Scheme (FHLDS) in January 2020 will allow 10,000 eligible First Home Buyers to purchase a home with a deposit as little as 5%. The increase in First Home Buyers entering the market is likely to cause an increase in housing demand and it’s usual to see a corresponding rise in prices in that section of the market, especially if interest rates stay low.
How does this impact you?
If you’re a First Home Buyer with an application approved by one of the 27 lenders involved in the scheme, this is good news. It’s also good news for investors who might see an increase in equity in their existing properties.
Open banking launching July
Open banking legislation was passed through parliament in August last year and is set to launch in July 2020. This reform is a fundamental change in Australia’s banking system. It allows consumers more control over their financial data and makes it easier to refinance or switch banks.
How will this impact me?
Your bank will no longer have a monopoly on your personal data, e.g. how much you earn and where you spend your money. You will be able to share credit and debit card, deposit account and transaction data with another bank so they can offer you a better deal. Open banking encourages more competition between banks as they have to work harder to keep customers by providing the best deals.
Increased and enhanced use of customer data
Analysing customer data to identify appropriate products or services is set to become even more prevalent. Marketers have more access than ever to customer preferences, geo-location, brand loyalties and social media use. The combination of both traditional and non-traditional data and advanced analytics is a powerful way to proactively identify consumer needs.
How will this impact me?
Thanks to the ability to collect customer feedback and analyse it, you’re likely to receive a better customer experience, improved products for your convenience or enjoyment and deals you actually want to use.
Looking to take advantage of these finance trends in 2020? Talk to a finance broker who can help you compare lenders to get the best deal, whether you want to switch mortgage providers or obtain a first home.