The term 'bank account' might diminish as the younger generation looks at the alternatives, an industry expert has claimed.
Last month, a survey by polling company D-CYFOR found that 39% of the UK public had never switched banks in their lifetime.
“Most people open their first account as they become young adults and get their first job,” said Gary Singh, COO at Ondot.
“Often their parents will guide them and – more often than not – they will end up with the same bank.”
Gary added that a 'digital first view' was essential when dealing with millennials or those looking for specialist banking services.
“In the future, it's likely that the whole experience will be digital, whether that's single or multiple accounts.
“The [term] 'bank account' might even diminish as millennials and GenZ instead look for mobile payment apps versus banks and ATMs.”
Switching accounts
Bacs launched the current account switch service (CASS) in September 2013 and by the end of 2016, more than 3.5 million UK current account customers had successfully moved between banking providers.
A Bacs spokesperson said: “When it comes to the numbers of people switching, there are many factors at play – high levels of satisfaction with the existing bank and a reluctance to move away from the familiar, for example, while our research shows that bank product innovation and promotion are the real drivers of switching.
“This promotion tends to be cyclical and the launch of Open Banking earlier this year is likely to see this increase.”
Bacs figures showed that nearly eight in 10 people were aware of the current account switch service, while the satisfaction level among those who have used it stands at 94%.
“However, we continue to work hard to build on these levels and 2018 has already seen high-level communication campaigns rolled out across a number of platforms, all of which has been developed specifically to raise awareness in the service,” the Bacs spokesperson added.
John Gunn, executive chairman at SynerGIS Capital, added: “The good news in the findings is that the majority of people have switched in their lifetime, and hopefully feel confident in moving their money again if needed.
“Unfortunately, it often takes a negative experience for customers to really look to change banks, when there are many benefits on offer from alternatives.
“Busy schedules and a misconception that switching is difficult contribute to people staying where they are, but that needn't be the case.”
Research by pensions advice specialist Portafina found that out of the top ten 'life admin' tasks that Brits avoided most often, 23% cited managing their bank accounts.
John added: “The current account switching service is free and simple to use if you have made a decision on where you want to move to, however, Open Banking provides a fantastic opportunity for challenger banks to provide you with the best deals.
“It's no longer the case that one bank fits all with regards to an individual's finances, so I think savvy customers will only continue to diversify their accounts.”
Norris Koppel, CEO and founder at Monese, said: “To some, switching bank accounts seems a daunting and time-consuming prospect and people often prefer to stick rather than twist – despite the benefits they are missing out on.
“Specialist, online or mobile banks like Monese have the opportunity to make the switching process extremely simple and fast – which is a key factor in encouraging that 39% to make a change.”
Using multiple banks
Speaking about current accounts two weeks ago, Edoardo Moreni, CEO and co-founder of Emma Technologies, said: “It's more likely that consumers will end up with three to four current accounts.”
Mobile-based bank Tandem agreed with this sentiment.
A Tandem spokesperson said: “We are increasingly seeing customers making use of more than one provider for their banking services.
“You might still have your core current account with one bank, but [you will] also have [a] card that you take with you on holiday with another.
“When it comes to things like savings, there's no reason why you should be using your core banking provider – a lot of the best rates are coming from challenger banks.”
SIGN UP TO OUR NEWSLETTER TO RECEIVE MORE NEWS LIKE THIS STORY
-
Temenos partners with ClearBank for cloud payments
Banking software company Temenos has formed a strategic relationship with ClearBank to provide banks with a faster route to market for real-time cloud payments...
-
Unity Trust Bank registers 34% rise in profits
Unity Trust Bank increased profits by 34% in 2019...
-
Believe the hype – why explainable AI is a trend that’s here to stay
Technology has become a ubiquitous part of our day-to-day lives...
-
Piloting tech updates: ‘The bigger the bank, the harder it is to get anything done’
In the latest Medianett filmed roundtable session, we discussed how important technology is in the banking space, and what impact the industry expects it to have on its businesses in the future...
-
What banks need to know about cloud security
One of the most common perceived concerns when adopting the cloud is the issue of security...
-
OakNorth sees 95% increase in pre-tax profits
OakNorth Bank has announced a 95% rise in pre-tax profits in 2019 to £65.9m, up from the £33.9m recorded in 2018...
-
Redwood Bank signs up to Women in Finance Charter
Redwood Bank has announced that it has signed up to the Women in Finance (WIF) Charter...
-
Masthaven launches digital Women in Leadership programme
Masthaven Bank has launched a new Women in Leadership digital development programme for female senior leaders...
-
Protecting against supply chain disruption and the domino effect
Disappointingly, many UK SME business owners don’t understand their supply chains...
-
Confused about which Isa to choose? Hopefully this mini-guide will help…
We are now firmly in Isa season, so you’re likely to read multiple articles about the most competitive Isa products in the market and how best to make the most of your Isa allowance before the end of the tax year...
-
Garden shed entrepreneurs contribute £16.6bn to the UK economy
Entrepreneurs who run their businesses from garden sheds contribute £16.6bn annually to the UK economy, according to a recent study...