UK consumers are ditching conventional cash and embracing technology as a direct result of COVID-19. New findings released by ThoughtWorks reveal that many adults are now making use of online banking to manage their money. Indeed, 62% now think they are in better control of their personal finances as a result.
Central to the findings is the overwhelming effect of coronavirus, with the pandemic resulting in more people refusing to use cash. Many of us are avoiding visits to traditional banks too, with 39% reporting that they haven't been into a branch since COVID-19 arrived. The grim situation during 2020 prompted 33% of those surveyed to try mobile banking for the first time.
And the days of using conventional cash look to be numbered with 31% respondents stating that they don't use it at all anymore. Conversely, many were upbeat about the generally positive aspects of digital banking and being able to manage their money online in the last year or so.
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Some 22% of those surveyed said they were now using apps and other tech platforms to make digital payments. Meanwhile, 18% said that they’d used downtime during lockdown to give their finances an overhaul, while building up savings and avoiding non-essential purchases.
UK consumers have also been looking to optimize their personal finances during lockdown, with 15% stating that they’ve been shopping around for better deals on financial products. In many cases they’ve pinpointed savings on fees, charges and interest rates by avoiding traditional high street names in favour of digital banks. A further 15% said that they’d now moved all of their financial affairs over to banking online.
The research data highlights how the move to digital has been led by the under 25 age group with 29% now using online banking and 20% shopping around to find better deals with newer names on the financial circuit.
Nevertheless, the trend away from using cash has been pretty universal, with 25% in the 35-54 age group and 15% of over 55s moving away from cash and towards digital payments and banking online. Overall, 33% said they’d now tried mobile banking and 36% had opened a PayPal account, while 13% had used Apple Pay to purchase goods.
The wider use of digital banking was reflected by 41% of those surveyed stating they’d dipped into online banking to check their balances, while 16% had cashed a cheque using a finance app. Online chat and AI resources had been used by 14% of respondents who needed help or advice while 14% had opened an account with an internet bank, including the likes of Monzo and Plum.
Attitudes towards handling conventional cash have changed drastically across the UK with 31% saying that they no longer carry money in their purse or wallet. Cashpoints are also being avoided by 28% of those surveyed with a further 24% of people stating that they’ve stopped writing paper cheques altogether.
“For long periods of 2020, households have adapted to confinement and technology has been a vital tool that has helped people to keep life going and stay connected with work and loved ones. In this context, with high streets empty and banks closed, many people discovered new ways to manage money and make payments online," noted Phil Hingley, Director of Financial Services at ThoughtWorks UK.
"With hindsight, 2020 could well be the year when cash died. Changes in consumer habits also raise urgent questions for high street banks, as technology and more agile customer interaction have moved consumers away from a reliance on the high street. The question for banks in 2021 is how they will adapt. We believe banks still have a crucial role to play but the days of them just safeguarding cash and issuing cheque books are well and truly over.”
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