The news: Close to one in three UK consumers have formed new banking relationships during the pandemic, per a new survey from financial technology provider FIS.
The study, which FIS conducted with Ipsos, used a sample with higher educational attainment and affluence than the UK’s general population. It covers new relationships with both financial institutions and non-bank companies.
By age groups: FIS’ survey covered adults ages 18 to 74, with findings showing that:
Younger millennials (ages 25 to 29) were the most likely to switch banks, at 46%.
Senior millennials (ages 30 to 40) and Gen Zers (ages 18 to 24) were tied in the middle at 39% each.
Gen Xers (ages 41 to 55) and Baby Boomers (ages 56 to 74), were the least likely to switch, at just 23% and 17%, respectively.
Why they switched: Respondents most frequently answered that they want better benefits, at 35%. FIS included other categories—and in a press release it shared examples of age groups being disproportionately represented:
Starting new life chapters, at 24%. Within this category, 48% of Gen Zers cited important life events such as getting a first job, starting university, or leaving school.
Accessing new financial products that weren’t available at other banks, at 23%. Meanwhile, 38% of young millennials cited this category, with mortgages and credit cards as examples.
Unpleasant customer service was the least-cited factor, at only 7% of respondents.
What do they want next?: FIS said that respondents prioritize accessing real-time/faster payments, which it called “key for consumers in the next six months.”
Access was the most sought-after among five categories, with 17% either replying they needed it now or definitely need it, plus another 14% replying that they might need it.
- Banking players should meet consumers where they are and deepen their newfound banking relationships by offering this in-demand feature.
- Faster payments have seen explosive growth in recent years through mobile P2P, per our 2021 UK Mobile Payments Forecast, with a 169% jump from 2015 to 2020.
The pervasiveness of new relationships is fostered by a banking environment in the UK that encourages competition and consumer choice:
- The Current Account Switching Service (CASS) makes changing banks easier by letting consumers pick a new bank and choose a change date, while the affected banks on both ends handle the rest of the process.
Open banking has also surged during the pandemic, per Experian, because it greases the wheels for fintechs to form relationships with consumers, while supporting data sharing for digital financial services.