While in-branch banking is not yet dead, it’s long since ceased to be the default option for Australian businesses and consumers.
Whether they’re asking for information, paying a bill or applying for a loan, most customers now prefer to engage with their bank or building society online, rather than in person, whenever it’s possible for them to do so.
Bank branch interactions have plummeted apace. They’re down 51 per cent on 2019 levels, with the COVID-19 crisis only accelerating the flight to digital. In 2025, more than 99 per cent of customer-bank interactions occurred via digital channels.
From branches to apps
Smart operators recognise that their online banking platforms and apps are now their primary interfaces with the world, the realms in which brands are built, customer relationships are forged and loyalties are won – and lost.
That’s why delivering a superlative digital experience is an urgent imperative for financial institutions of all stripes and sizes.
Recognition of this fact has been one of the chief drivers behind a wave of consolidation within the financial services sector in recent years – one which has seen a host of small and mid-sized players joining forces to achieve the critical mass needed to make transformative investment in digital experience viable.
They include the likes of Qudos and Bank Australia, and Auswide and MyState Bank – institutions which have come together with a mandate from their members to create merged entities that are more competitive, customer focused and digitally driven.
Differentiating your offering in the digital realm
How best to set about improving digital experience is, however, the $64 million question.
While the big four banks can choose to do everything in-house and from scratch – spending nine and 10 figure sums on developing bespoke experiences and apps that set them apart from the competition – that’s not a viable option for their smaller, less cashed-up counterparts.
Many second and third-tier providers currently use utility-style banking solutions to deliver both their core banking functionality and their digital services capability.
It’s a cost-effective modus operandi – one that served this cohort very well in the branch banking era – but it offers limited scope for institutions to customise the digital experiences they offer to their customers.
Instead, they’re constrained by one-size-fits-all models that don’t enable them to differentiate their digital platforms and apps from those of competitors that rely on the same vendors and solutions.
Given hyper-personalisation and responsive, seamless service are key to customer retention in today’s times, it’s a far from ideal approach for any institution seeking to grow market share and profits.
Decoupling the digital experience
Fortunately, there is a way forward, one that allows financial services providers to take control of their digital channels and develop and optimise new experiences quickly and cost effectively.
Partnering with an engagement banking software vendor whose solution addresses the unique needs of the financial services sector can provide you with the tools to develop outstanding digital experiences, independently of your core banking software provider.
Ideally, you’ll choose engagement banking technology that connects seamlessly with your core banking platform and with third-party fintech providers whose solutions and services will complement and enhance your unique digital experience.
Once you’ve deployed a platform with composable, pre-integrated customer experience and AI-powered customer lifetime orchestration capabilities, you’ll be able to implement
out-of-the-box journeys across all your digital and physical channels, at a fraction of the cost of developing them in-house.
Delivering the digital experiences customers demand
In today’s times, financial services institutions are judged on the quality of the customer experiences they deliver. The overwhelming majority of those experiences are digital and getting it right, online and in your app, can be “do or die”.
Engagement banking software that allows you to develop and deliver customised digital experiences independently of your core banking platform can help you differentiate and elevate your brand cost effectively, within weeks and months, not the years it would take to build similar capabilities from scratch.
If enhancing your appeal to consumers and businesses in 2026 is a priority, it’s an approach that will serve you extremely well.
Stuart Ward, senior account executive, Backbase
