[22c]

The article does not do a good job of explaining the situation, but (from memory) digital banks in Australia can not give out their own loans. They're on special, limited (but supposedly easier to get) licenses from the Australian government that allows them to do "banky" things but not offer loans.

They do still offer loans, but they're "white-label" loans from other providers, which means the margins are way thinner and you're mostly at the mercy of the "white-label" provider when it comes to setting your lower threshold.

My guess is people don't mind paying an extra quarter of a percent or so if they get a really nice app and modern banking experience when interest rates are low, but with recent rate hikes they're probably shopping around and going with the best rate they can get.

The other factor is that traditional Australian banks have put efforts into modernising themselves over the past few years, spending a lot on their apps etc. so the differences between "digital" banks and traditional banks are shrinking.