Australia’s banking sector has long been dominated by the Big Four, but 2025 is shaping up to be a year of disruption. Thrift banks—community-focused, member-owned financial institutions—are gaining serious momentum, promising not just better rates but a renewed focus on local impact. Are thrift banks poised to transform the way Aussies save, borrow, and bank?
Thrift banks, often known as mutual banks or building societies in Australia, are financial institutions that prioritise their members over shareholders. Unlike the major banks, profits are either reinvested or returned to customers in the form of better rates and lower fees. These banks typically offer:
While thrift banks aren’t new, the sector is expanding rapidly thanks to digital innovation, regulatory reforms, and a growing appetite for ethical banking options.
Two major developments are fuelling the thrift bank surge in 2025:
In practice, this means more choice for Australians—and more pressure on traditional banks to lift their game.
Thrift banks are attracting attention for their competitive rates and unique focus on community wellbeing. Here’s how they’re shaking up the market:
For example, Newcastle Permanent, a leading mutual bank, recently announced a $10 million community fund for affordable housing initiatives—a move that’s resonated with borrowers frustrated by the impersonal service of larger banks.
Thrift banks aren’t for everyone, but they’re a compelling option for Australians who value:
With open banking making it easier than ever to switch providers, 2025 is an ideal time to review your banking options. Look for a thrift bank that aligns with your values—and compare products carefully to ensure you’re getting the best deal.