Before they relocated to their current office in West Perth, many of us would have walked or driven past the UniBank branch on Broadway, unaware that UniBank was born out of the Chemistry Department right here at UWA way back in 1964, and has since grown to be a network of over 10,000 university staff,students, and graduates.
Laney Kunum asked UniBank’s General Manager Mike Lanzing a few questions about the UniBank Social Spending report, including how we can go about #FightingFOMO and ensuring our student budgets remain unbroken.
Laney: The students surveyed in this report were predominantly from New South Wales and Victoria – only 17% were from WA. Given your research on social media spending across Australia, how do you think Western Australia compares to the other states, are we better or worse?
Mike: Whilst the lived student experience may vary state to state, digital lives for students can be quite similar. Anecdotally, you’d expect differences in real life to drive differences in what we engage with online, but I think we also see very similar themes for students – a love of travel and sharing experiences, not just material things but being at a show with friends or dining out are all really relatable and familiar themes that came through our research. Though there is certainly a cohort of students that restrict their time on social media, the majority are definitely happy to spend at least 2-4 hours a day across Facebook, Instagram, Snapchat, etc.
Clearly, social media significantly impacts the lives of students on a daily basis, with the actual numbers showing the startling monetary effect on students. Of particular concern is the fact that 82% of students spend their money on non-essential items on social media, even though 28% purchase things they can’t afford and 32% ultimately regret the purchases they make. What is your advice on navigating the myriad of recreational and retail offerings on social media and making sure we not only balance our social lives but our bank accounts?
At one level we live in a global economy and the opportunity to follow, engage and buy your favourite brands is a great thing. Of course, there’s a difference between a considered purchase and an impulse buy and the last thing you want is to be caught short at the end of the month. That’s why many of the best tips to avoid regretful spending are tried-and-true ways of stopping impulse spending. For instance, always give yourself a day or so to consider purchases and figure out whether your purchase is a ‘want’ or a ‘need’ buy. Our research also showed 20% of students are savvy in spreading payments across a period of time by using ‘buy-now, pay-later’ services. Used wisely within their interest-free period these services can be useful in spreading costs.
Convenience is key, but it is also the culprit. The seamlessness of social media is cited by students as a major contributor to their online spending. By the same token, banking apps are the most popular way to track finances (55%) and free bookkeeping apps such as Mint are rising in popularity. As such, would you agree that the “tap and go” culture, while providing substantial convenience, also desensitises us from the financial effects of our spending?
“Tap and go” convenience as a key and culprit is a great way of summarising the issue. “Tap and go” definitely makes our lives easier and less stressful when it comes to the basic payment function, that’s a good thing. Despite this, there is certainly existing evidence that taking out cash is an effective way of tangibly understanding how much you spend, versus solely using “tap and go”.
Having said that, forming a budget and sticking to it is always one of the most meaningful ways to manage your cash-flow. Just tracking your general spending for a month can be a real insight, that kind of active monitoring can counter-balance the potential to be desensitized in a “tap and go” culture.
The report shows that 31% of students live within their means and take advantage of discounts, which while good, is still less than half of the students surveyed, and contrasts with the fact that 76% of students regularly find themselves under financial pressure. Considering these statistics, what are your top three tips for students with regards to budgeting and fostering a healthy attitude towards managing money?
First, as your question alluded to, keeping an eye out for specials and discounts can provide savings. Students we speak to who are across their money often wait for sales to buy items they really like.
Second, take control of your money. Tracking your spending for just a month can give you a really clear picture of where you need to spend and where you might be able to cut back.
Finally, do your research. There is power in doing your own research on financial products, it’s a skill we need to promote more in Australia. Finding the best service providers for your circumstances can potentially save you hundreds of dollars a year. Ask family and friends, if they have made money mistakes they can also help you avoid costly financial errors.
Travel takes up almost 40% of student spending, with both European sojourns and study abroad being popular aspects of university life. How does UniBank support students in this area?
A big part of supporting students who want to travel for us comes down to providing low-fee everyday banking accounts, we have a number of innovations across our brand like our cash-passport that lets you carry multiple currencies that help with travel too.
But we do want to improve our service to students on this front, and we’re currently investigating potential for discounted travel options for students through third-parties. So we’re definitely still investigating how we can continue our support for students travelling abroad.
On a personal note, you were Channel Distribution Manager for AMP Bank in the late 90s/early 2000s right on the cusp of the internet/digital age, focusing on alternative methods of promoting products and services through alliances and the internet. Today as GM of UniBank, were you personally surprised by the results of this Social Media Spending Report or did you have an inkling back then on what the internet could grow to mean for both companies and small businesses in terms of marketing and sales of their products and services? Additionally, what are some key alliances UniBank has made in order to better achieve its objectives?
When I was Channel Distribution Manager for AMP Bank we were certainly exploring the internet as a new way to promote our services, but online service and promotion was really in its infancy. While our team at the time felt the internet was going to pave the way for a digital future, we couldn’t have predicted that in under 20 years that mobile banking and social media would be ubiquitous across Australia.
Having said that, UniBank has been able to achieve our objectives in large part to embracing digital transformation. We have a great mobile app that allows members access to control their banking on the go.
In terms of partnerships, we work closely with universities and peak bodies around Australia. As we exclusively serve staff, graduates, and students in the university sector it’s crucial that we understand their needs so we can reflect that in our service.
UniBank was recently named by the Ethisphere Institute as one of the Most Ethical Companies of 2018, one of only four banks in the world to be recognised as such. How important of an achievement is this to UniBank, especially post-Royal Banking Commission?
It’s really important to us that we put our ethics at the forefront of our business – both in how we operate and how we treat customers.
Operationally, we’re a carbon-neutral bank and we don’t invest in fossil fuel polluters. As our members are both customers and shareholders, we don’t have a conflict between those two interests. All profits are invested in the bank to expand member service and experience, and build better products.
Of course, this is important in the moment of the Royal Commission, but it’s action we’ve been committed years before it was announced. For us, ethical practice and community investment has been an ongoing focus since our inception. We’ve been acting, not reacting in that regard.
Finally, since UniBank was born out of the Chemistry Department here at The University of Western Australia, you could say that UWA and UniBank have a pretty special connection. UniBank has now grown to service not just the needs of students but staff and their families across Australia, which is amazing! Given this, what do you believe sets UniBank apart from other banks in terms of understanding university life and its specific needs, and how would interested students go about joining UniBank?
Yeah, we do have a very special connection with UWA.
One of the beautiful things about customer-owned banks and credit unions is that they are started by people who are passionate about helping others in their community, it’s about putting people first.
I’m not sure that when the UWA chemistry team started UniBank they could have envisioned it turning into a network of over 10,000 university staff, students, and graduates helping each other out!
I think that’s still our biggest point of difference, members as sole shareholders and customers. It means our purpose is not about short-term dividends, it’s the long term financial interests of our members. Our vision is to promote this model of mutual and ethical banking to all Australians in the university sector.
If anyone would like to support us and join, you can do so through our website www.unibank.com.au.
Laney Kunum | Finance Editor