A new study reveals an existential threat for banks not aboard the crypto train

The CBA’s move into cryptocurrency could pay off handsomely for the Big 4 bank with a new study from Visa revealing that up to a third of Australian crypto-owners saying they are likely or very likely to switch their primary bank to one that offers crypto products in the next 12 months.

With around 20% of Australians owning digital assets that means up to 7% of bank customers may change who they bank with.

The upside for banks that do embrace crypto is that the Visa research also found that a significant majority of crypto owners (82%) are interested in buying crypto from their bank. 

The global study The Crypto Phenomenon: Consumer Attitudes & Usage, found that awareness of crypto among financial decision makers in Australia is near universal at 93%. 

The research also shows growing adoption of crypto, with more than one quarter (27%) of Australian crypto-aware respondents having directly engaged with crypto either as an investment vehicle or as a medium of exchange. 

Anthony Jones, Visa’s ANZ Head of Innovation said the findings reveal a major shift in how people are thinking about money and investment.

“Digital currencies and crypto assets signify a technology shift not only for money movement but also digital ownership, with growth in this space poised to continue,” he said.

“As consumer investment into this new asset class gains momentum and Australians start to evolve how they think about the future of money, every financial institution will require a strategy for crypto.”

The study findings come as the Australian government announced this week that it will investigate the feasibility of a Central Bank digital currency, as it looks to embrace embrace cryptocurrency and digital assets in the wake of the Bragg report into the sector.

The proposals by Treasurer Josh Frydenberg are part of the biggest shake-up to the nation’s payments system in 25 years.

The Visa study surveyed more than 790 financial decision makers across Australia. Among the key insights it found that:

• 36% of Aussie crypto owners say they are very likely to use crypto to pay friends or family in the next 12 months and 33% are very likely to buy crypto goods such as Non-Fungible Tokens (NFTs).
• The biggest drivers of owning and using cryptocurrency are to build wealth (40%), to take part in the “financial way of the future” (34%) and not wanting to miss out on its potential rise (28%).
• Among crypto-owners in Australia, 74% express interest in crypto-linked cards, which allow you to spend crypto at the retailers where you shop in the same way you can use a debit or credit card. Similarly, 73% are interested in crypto rewards, which allow you to earn crypto as a reward for your card spending.
• Of the one in four (27%) crypto-aware adults that already own or use cryptocurrency (“crypto-owners”), over half of that group (59%) say their use has increased in the past year.  The remaining three quarters (73%) of crypto-aware Australians do not currently own cryptocurrency but 26% of that group have taken steps to learn more.
• 36% of crypto owners say they are very likely to use crypto to pay friends or family in the next 12 months and 33% are very likely to buy crypto goods such as Non-Fungible Tokens (NFTs). 
• Among crypto-owners, the biggest drivers of owning and using cryptocurrency are to build wealth (40%), to take part in the “financial way of the future” (34%) and not wanting to miss out on its potential rise (28%). 

Visa has responded to this growing interest by launching a Global Crypto Advisory, within Visa Consulting and Analytics  to help clients better understand the sector

Anthony Jones said it’s for financial institutions thinking about a crypto offering, retailers looking to delve into NFTs, or central banks exploring digital currencies. 

“Over the past year, there has been a notable shift in mindset across the payments ecosystem, with businesses moving from a curiosity in crypto to actually building a strategy and product roadmap,” Jones said.

“We are excited to help our clients and partners, globally and here in Australia, navigate this new era of money movement.”    

The Crypto Phenomenon: Consumer Attitudes & Usage report can be downloaded here.