Bankwest sets ball rolling

Rewards for transaction accounts

MARIA BEKIARIS

JIM TSINGANOS

We’re used to seeing rewards linked to credit cards but not transaction accounts. That’s why the Bankwest Rewards Transaction Account, the first account to offer rewards, caught Money’s eye and picked up an award for Best Innovative Product – Banking in our 2013 Best of the Best awards. The question is whether other institutions will follow suit.

“It’s likely that we’ll see more rewards-style and incentive-driven transaction account promotions as competition is increasing in the transaction account market,” says RateCity spokesperson, Michelle Hutchison. This is largely thanks to the reforms that made switching transaction accounts easier for consumers, she says.

As well as rewards programs, other international trends in transaction accounts may make their way here. For example, some overseas transaction accounts offer cash back or gift cards to customers who open a new account, says Hutchison. “We’re also seeing accounts that offer a ‘satisfaction guarantee’,” she adds, offering the example of the First Direct 1st Account in Britain. (First Direct will pay £100 ($150) to unsatisfied customers who close their account within 12 months of opening it; other conditions about use of the account also apply.)

“This guarantee scheme is a great way to encourage customer retention and it’s likely that the scheme will be adopted by financial institutions in Australia, because customer retention will be an increasingly important issue for our banks as more consumers switch transaction accounts,” says Hutchison.

Any increase in competition for financial products and good value promotions and deals is a great thing for consumers, says Hutchison – just don’t get too swept away with rewards and incentives and forget to do your research.

“Consumers need to make sure they understand all of the terms and conditions and compare products at comparison sites like RateCity to make sure it’s a good-value deal that suits their needs,” Hutchison says. “For instance, the Bankwest Rewards Transaction Account would be good value to those who keep their balance high and often make transactions at Australian retailers.”

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