By Colin Weir, CEO, MOROKU
The financial landscape in Australia is undergoing a significant transformation, marked by the increasing closure of bank branches and ATMs. This shift is driven by the rapid adoption of digital banking and payments, which offer unparalleled convenience, efficiency and when designed correctly, support for strong money habits. However, this transition towards a cashless society presents real challenges concerning financial inclusion.
The decline in cash usage has been stark. According to the Reserve Bank of Australia (RBA), cash accounted for just 13% of all payments in 20221. This trend is further evidenced by the reduction in ATMs, from 13,814 in 2017 to 5,693 in 20232. While digital payments offer benefits such as transparency and reduced crime, they also risk excluding vulnerable populations and removing age-old methods of money management, especially for those for whom digital is not natural or accessible.
For many Australians, especially the elderly, the homeless, those with disabilities, and people in remote areas, cash remains a crucial part of daily life. Nearly one in five Australians over 65 are high cash users1. Additionally, low-income households often rely on cash for budgeting and managing expenses. The move to digital can leave these groups behind, exacerbating financial exclusion.
Homeless individuals and those without stable housing face even greater challenges. Without a fixed address, accessing digital banking services becomes nearly impossible. This exclusion can lead to a vicious cycle of poverty and marginalisation. To address these issues, human centred design is needed.
Financial institutions must ensure that digital banking and payment solutions are both accessible and encourage and support strong money habits and the shift to digital for all demographics. This means moving beyond ease of use design paradigms to ones that are more empowering, ones that are not just easy to use, but fun to use and recognise fundamental human needs. Nietsczhe took real issue with Socrates because he realised that humans rely much less on logic and reason than we like to think, but rather on our emotions and our hunger for reward and fitness payoffs. Design systems for digital money must make a similar shift if they are to empower and include all of society.
An organism that sees reality as it is, is never more fit than an organism of equal complexity that sees none of reality and is just tuned to fitness payoffs Dr Don Hoffman
For years, law makers, financiers and educators have been trying to teach people the truth about money. They have proposed that money has a set of properties and behaves in a certain predefined ways within the axes of time, space and motion. The challenge with this approach is that even if the theorems are correct, the methods of education do not correlate with the way people respond to the world about them. We respond not to the truth but to the reward of fitness payoffs. Baking this understanding deep within the design system is critical in delivering a more inclusive digital financial system.
As the financially vulnerable are included in the digital experience, there will be less resistance from lobbyists to removing cash, and with it the life blood of crime. Reducing the use of cash for crime and tax fraud is a critical driver for cashless. So long as the financially vulnerable are excluded, the cash lifeline for the shadow economy will persist, providing a double impetus to complete the digitisation of the financially excluded.
While the move towards a cashless society in Australia offers numerous benefits, it is imperative to address the challenges of financial inclusion. By adopting a holistic approach that combines digital innovation with targeted support for vulnerable populations by recognising that their needs go well beyond ease of use, to incorporate a more emotionally intelligent response, we can ensure that no one is left behind in this digital revolution and that further pressure is placed on the shadow economy.
