This article is based on my personal research and experience in making the switch to more ethical banking in Australia. It is intended for educational purposes only and does not constitute financial advice. You should always seek financial advice that is tailored to your personal situation and needs.
Choosing where to open my first bank account in Australia was not a deliberate decision. I’d arrived in the country in 2007 as an international student and needed an account to manage my money. Dealing with the challenges of identity verification without a history of residential records or a Medicare card was difficult enough. And learning more about the different available bank brands wasn’t a priority for me at the time. What’s more, all banks seemed to offer more or less exactly the same thing anyway.
So, I did what most people do in this scenario. I just walked into the nearest branch and opened my first Australian bank account with NAB. Over the years, I added a joined account with my partner, a savings account and a credit card. Staying with them was easy and convenient and I didn’t put much further thought into it.
As it turns out, I’m not alone with my banking set and forget mentality. 40% of Australians are still with their childhood bank and 1 in 5 people have said that they could not be bothered changing. In fact, more people file for divorce than switch their banks.
Why ethical banking matters
The thing is, where we choose to bank matters. Financial institutions invest our hard-earned savings — amongst other things — into loans to help small businesses and large corporations grow and expand. And if you care about environmental or ethical issues, these investments are unlikely to all be aligned with our personal values. For example, a recent report revealed that Barclays has financed $56 billion in new fossil fuel projects since January 2021.
In Australia, a similar picture emerges. According to the Australian Conservation Foundation and Market Forces, all four major Australian banks continue to back fossil fuel projects until at least 2030. So, if you’re banking with them, you’re inadvertently supporting sectors you may otherwise be trying to avoid.