The Bank of Mum and Dad: A New Era for More Australian Businesses
It's clear from recent figures that the Bank of Mum and Dad has morphed into a critical engine for the Australian economy. Indeed, recent data released by Finder.com.au reveals that this 'bank' has extended its remit well beyond the traditional realms of helping fund home deposits, and into every day purchasing.
Finder.com.au’s research found that in 2021 one third of Australian parents are already helping pay their adult children's household bills, while nearly 50 per cent are helping pay for food and other essential items.
But there's more to this story than meets the eye. These figures aren't just evidence of familial support – they signal a changing tide in how our economy functions and who has the power to make an impact.
To put it plainly, the Bank of Mum and Dad is no longer the exclusive domain of financial institutions. It's morphed into a major player in the Australian business sphere as the bank of mum and dad is collectively worth more than $35 billion.
Moreover, it appears to be a trend that is growing, not diminishing, which offers a significant opportunity for businesses.
A parents job is never done and the evidence is they’re already helping the Australian economy tick over.
How can businesses ensure they’re getting their fair share of the bank of mum and dad?
Firstly, businesses need to frame themselves in terms of personal stories and social impact. Parents are, by in large, protective carers motivated by the desire to see their children thrive. They won’t just be paying the bills, they’ll be on their phone checking if the company their darling child is with is any good, and commenting to their adult child accordingly. Any business that promises to improve the lives of younger generations is likely to be viewed favourably.
Secondly, it's vital to consider trust. Parents are more likely to use, and steer their children to, brands that are fair, transparent and enable trusted paths for the help they want to give. Businesses that demonstrate these qualities can gain the trust of not just one person in a family but have the potential to acquire and retain entire families.
Furthermore, by aligning their corporate strategies with sustainable and ethical practices, companies can become more attractive to this group of investors. This is not simply a moral endeavour; according to the 2020 Edelman Trust Barometer, trust in businesses is a decisive factor for 81% of consumers globally when making a purchase.
These figures clearly indicate that businesses, especially those in the early stages of growth, could benefit enormously from the power of the Bank of Mum and Dad. Not only does this 'bank' provide essential financial support, but it also offers a strong, enduring connection to a broader mutli-generational group of current and potential customers.
In essence, the Bank of Mum and Dad is no longer just a way of getting a toe in the housing market; it's a potent tool for the astute to bring families together and under one brand umbrella.
By making it easier for families to help each other contribute to pay bills (something already happening), businesses can amplify and normalise this parental generosity and demonstrate the values and culture that company exudes for brand loyalty, customer growth, lower costs and positive social impact.
As our economy continues to evolve, we should not underestimate the significance of this shift. The Bank of Mum and Dad is breaking new ground, pushing boundaries, and playing an increasingly critical role in Australia's economic landscape. If businesses open their doors to this novel investor, they may find an ally willing to go the extra mile for their success.
Now, more than ever, it's time to invite the Bank of Mum and Dad into the boardroom. Their influence on Australia's business future could be more profound than we might imagine.
Helppay is a 100% Australian owned and operated company that partners with service organisations in complex and highly regulated industries to improve cash flow, reduce customer debt and enhance companies social standing by removing debt from the communities they serve..
HelpPay's B2C app makes getting and giving help easy and trusted and Helppay's B2B platform and API enables businesses to offer a debt prevention service and track performance in conjunction with existing customer soltutions and billing programs.