BLOG: Interacting with current accounts in a post-pandemic era
The pandemic has impacted core parts of our lives, none more so than our finances. From shifts in employment to changing spending habits, our attitudes to money are not the same as they once were.
Nowhere is this more evident than with current accounts. As the channel through which we receive our salaries, transfer money to friends and budget finances, current accounts, and the way we interact with them, can offer wider insights into how we navigate our finances in this changed world.
Towards the end of last year, the Current Account Switch Service, owned and operated by Pay.UK, the home of UK retail payments, commissioned research to understand how we’re now using our current accounts. We saw significant shifts that ultimately will impact the banks we’re choosing as priorities change.
In a market where there are fewer financial incentives to switch, banks must consider shifting attitudes, including nuances between different groups, to retain customers and appeal to new ones.
The channel shift to digital-first banking
Our research shows the pandemic exacerbated the ongoing channel shift in banking, with many of us placing less importance on in-branch banking and opting instead for providers with better digital capabilities.
As a result of lockdowns nearly a quarter of people surveyed (24%) said they reduced their use of branches, with a subsequent increased use of mobile banking (33%) and telephone banking (5%).
We believe this change is here to stay as restrictions ease, meaning banks will have to consider their digital offering carefully as many of us now deem that increasingly important. However, there is a fine line to tread, as some people still want the personal touch of a branch network.
Different groups interact with their current accounts differently
While some current account trends cross age, gender and income, our research shows others can be more nuanced. We recommend people check they aren’t being ‘left behind.’
For example, the higher the household income, the more likely an individual is to be thinking about switching their bank account. Four in 10 (40%) of people on incomes of over £70,000 are considering switching compared to just 20% of those on less than £20,000. This suggests those on lower incomes, who may benefit most from switching bank account, are not taking advantage of the opportunity to switch if they need to.
One reason for this is awareness. The research showed lower-income earners tended to be less aware of switching offers. They were also less aware of the Current Account Switch Service itself.
Another surprising difference was in the bank account switching behaviour between men and women. Of those who’d never used the Current Account Switch Service before, men were 50% more likely to be aware the service existed compared to women (30% vs 20% of total respondents). Men were also more likely to view switching overall positively.
While these findings don’t provide a rationale for this, there is wider research on gender attitudes to financial services that goes some way to explaining it. It could be that women are more risk-averse than men when it comes to personal banking, demonstrated in a 2019 study by Deloitte.[i]
These differences provide initial insight into how we’re interacting with our current accounts in this post-pandemic era. Whatever your age, gender, income or social background, your current account should meet your needs.
If you want to find out more about switching, visit our website at https://bit.ly/2TKTuDf
Jo Anne Ainsley is senior service lines manager at Pay.UK