Mobile banking has become the leading channel for banking in Australia, with 69% of Australian online adults having used a mobile banking app in the past month, according to new research by advisory firm Forrester.

This shift in customer behavior is transforming the local banking landscape, reshaping payment preferences, accelerating the move toward cashless transactions, and contributing to the decline of physical banking channels.

These findings align with data from the Australian Banking Association (ABA), which reports that 99.3% of customer-bank interactions are now occurring via digital channels.

These changes have led to tangible improvements for Australians. People are now interacting with their banks more frequently than ever before, with digital banking interactions growing by 68% since 2019.

Meanwhile, in-person branch transactions have fallen 51% over the same period.

This digital transformation is also reshaping payment behavior. Over the past year, Australians have made A$160 billion (US$104 billion) in payments with their mobile wallets, up 28% from the previous year. In contrast, the total value of ATM withdrawals reached A$106 billion (US$68.9 billion).

Mobile wallet usage has also far surpassed ATM withdrawals in volume, with 4 billion mobile wallet transactions versus 353 million ATM withdrawals. This makes mobile payments eleven times more frequent than cash withdrawals.

Westpac leads in digital experience

Forrester, which conducted a review of the mobile apps of Australia’s Big Four banks, found that within the traditional banking sector, Westpac remains the top performer in digital experience in 2025 for now the third consecutive year.

In particular, the bank scored the highest in Forrester’s Digital Experience Review, recognized for offering personalized insights and actionable recommendations, such as prompting users to top up low balances, and educating them on how to prevent future charges. Key features on its mobile app include tailored loan repayment suggestions, proactive nudges and alerts that help users avoid fees.

Commonwealth Bank (CommBank), meanwhile, stands out for its account management and investment features. The bank’s app includes a suite of tools for card management and budget tracking, supported by color-coded graphical representations. It also estimates spare cash, encouraging customers to increase savings.

CommBank’s investment hub differentiates the bank by offering educational content and intuitive comparison tools that help customers choose investment products based on their experience level, goals, and risk appetite.

Meanwhile, National Australia Bank (NAB) is emphasizing financial discipline, and Australia and New Zealand Banking Group (ANZ) is focusing on improving usability with natural-language app search, making it easier for customers to find information and complete tasks intuitively.

AI, fraud prevention among top trends

The Forrester report also highlights two major trends shaping the Australian fintech, namely artificial intelligence (AI) and fraud prevention.

In particular, it notes that Australia’s leading banks are increasingly using AI-powered insights to help customers stay on top of their finances, such as by suggesting that a customer set up an offset account to reduce interest repayments. Conversational AI chatbots are also being rolled out to improve access to services like dispute resolution.

Security is also a top concern amid evolving scam tactics and rising losses. Banks are strengthening fraud prevention capabilities through real-time alerts, scam detection tools, and educational prompts.

Despite improvements in personalization and security, most banks still fall short in helping customers improve their overall, long-term financial health. Many offer credit scores and budgeting tools, but lack truly actionable insights, such as reminders for recurring late payments or tailored financial health plans.

According to a Forrester survey, Australian banking customers’ top priorities are alerts for insufficient funds before upcoming expenses, named by 60% of respondents, followed by tools to track their financial health, cited by 44% of respondents, and product recommendations suited to their financial circumstances, named by 43% of respondents.

Branch and ATM closures continue

The shift toward digital banking is accelerating the decline of physical banking. According to new data from Australian Prudential Regulation Authority (APRA), 155 branches closed in the 2024-2025 financial year, leaving 3,205 across the country. That marks a 5% drop in one year and a 33% decrease over five years.

The number of ATMs has also fallen sharply, down 333 in the past year to 5,143, or nearly half the total recorded in 2020.

Australia’s Big Four banks, namely CommBank, Westpac, NAB, and ANZ, continue to dominate the banking sector, collectively holding assets worth around A$3.90 trillion (US$2.5 trillion), representing roughly 70% of the market.

While neobanks once challenged these incumbents, most have struggled to sustain operations. In early 2021, Xinja folded, handing back its banking license, and returning all customer deposits. This was followed by Volt Bank in mid-2022.

Featured image: Edited by Fintech News Singapore, based on image by padastocker and fabrikasimf via Freepik