Expert: Bruce Keith, Bridgeweave, Facilitator: Phil Alcock, Raisin UK
Key Takeaways
- Shift to digital channels and away from branches / stores
- Shift away from cash
- Shift to Banking for different reasons – ethical / environmental
- These shifts were happening before Covid – has the pandemic fundamentally changed customer behaviour forever or will customers revert back to how things were
Context
Digital vs Physical
The way people bank has changed, but it might not be permanent, or at least not yet. This is perhaps unsurprising since lockdowns have limited the choice of physical channels, and clearly UK consumers have been unable to visit physical stores and branches.
Banks and Building societies also took measures to close physical outlets in response to the pandemic for a number of reasons. However, it was felt that banks and building societies should be cautious in seeing this catalyst to digital channel adoption as permanent.
Banks can’t assume customers won’t revert to their previous channel preferences. If FS companies want UK consumer behaviours to stick, even in the current environment, it will be necessary to invest in marketing, to build awareness of the options open to customers, to share the successful experiences of new digital customers, as well as to support vulnerable customers or those that still do not feel at ease using digital channels.
Use of Cash
The use of cash has been in decline for some time, but it was felt that the pandemic has accelerated the decline.
Consumers clearly gravitated to online for purchasing essentials. At the same time, concerns were raised about whether physical cash could spread the disease. This has contributed to falls in cash usage, alongside a rise in payments using cards and online or mobile payments tools.
Where people were still purchasing from physical stores, contactless was offered as sometimes the only option. Is cash ever going to resume its traditional convenience function within society?
Choosing banking providers and products for different reasons
Perhaps the pandemic has given UK consumers the opportunity to consider more closely who the bank with and for what reasons.
Increasingly, choice will be influenced by the banks’ own behaviour, whether that is in supporting communities, being transparent in their activities, delivering a healthy working environment for staff or backing up their ethical and environmental policies.
It was felt that UK consumers are increasingly aware of banks’ approach to maximising profits and with a new cohort of digital or mobile-only players, there will be increased pressure to deliver a more sustainable business model, especially with the younger demograph.
The point was made though that during the initial lockdown, the Bank of England and the bigger high street players, did respond quickly to mitigate distress situations with the introductions of repayment holidays and access to additional funding.
