Unbanked Australians in 2025: Causes, Impacts, and Solutions

Banking has long been considered a basic pillar of modern life, but in 2025, a growing number of Australians are living without access to traditional financial institutions. Known as the ‘unbanked’, this group is often overlooked in national economic debates—but their numbers are rising, and the implications for financial inclusion, consumer rights, and the broader economy are significant. Here’s what’s behind the rise of the unbanked, who’s most affected, and how new solutions are reshaping Australia’s financial landscape.

Who Are the Unbanked—and Why Are Their Numbers Growing?

In the Australian context, ‘unbanked’ refers to individuals who lack access to basic banking services such as transaction accounts, debit cards, or even digital payment tools. While Australia’s major banks tout near-universal access, recent data from the Australian Bureau of Statistics and FinTech Australia show that an estimated 3% of adults—over 600,000 people—remain unbanked or severely underbanked in 2025, up from 2.2% in 2020.

• Cost-of-living pressures: As inflation and housing costs continue to bite, more Australians are falling below minimum balance thresholds or accruing fees that lead to account closures.
• Distrust and disengagement: High-profile banking scandals and ongoing complaints about customer service have eroded trust, pushing some to abandon banks altogether.
• Barriers for migrants and Indigenous Australians: Lack of documentation, language barriers, and remote locations remain significant hurdles for opening accounts.
• Tech divide: While digital banking is booming, older Australians and those in rural areas often lack reliable internet or digital literacy.

Why It Matters: Social and Economic Impacts

Being unbanked isn’t just inconvenient—it can have far-reaching consequences. Without a bank account, Australians can’t easily receive wages, access government benefits, or build a credit history. Everyday tasks become more expensive, as unbanked individuals often rely on high-fee prepaid cards, payday lenders, or cash-based alternatives.

Real-world impacts in 2025 include:

• Widening inequality: The cost of financial exclusion is estimated at over $1,400 per person annually, according to Good Shepherd Australia’s 2025 Financial Inclusion Report.
• Risk of predatory lending: Unbanked Australians are more likely to fall victim to payday lenders and buy-now-pay-later schemes with high fees and little transparency.
• Barriers to economic participation: Employers, landlords, and utility companies increasingly require digital payments, making life harder for those without accounts.

Policy, Fintech, and the Path Forward

The federal government’s 2025 Financial Inclusion Roadmap has prioritised reducing the number of unbanked Australians, with new policies aimed at:

• Mandating ‘no-fee’ basic accounts at all major banks, with simplified ID requirements.
• Expanding digital ID initiatives, such as myGovID, to streamline access for migrants and remote communities.
• Investing $45 million in digital literacy programs targeting seniors and regional residents.

Meanwhile, Australian fintechs are playing a vital role. Neobanks and digital wallet providers like Up, Hay, and PayID are offering low-cost, app-based accounts with minimal paperwork. Community banking pilots in regional areas—such as Bendigo Bank’s mobile branches—are bridging the urban-rural divide.

Yet, challenges remain. Digital-only solutions don’t serve everyone, especially those with limited tech access or who prefer face-to-face service. A balanced approach, combining policy reform, technology, and community outreach, is critical for tackling financial exclusion in 2025 and beyond.

Conclusion: Towards a More Inclusive Financial Future

Australia’s unbanked population may be a minority, but their experiences highlight the gaps in our financial system. As policy, technology, and community initiatives converge, there’s hope for a more inclusive future where no one is left behind. Whether you’re a consumer, business owner, or policymaker, understanding the unbanked is essential for building a fairer, more resilient financial landscape.