More than 30 per cent of British consumers have entered a new banking relationship with a financial institution or non-bank service provider during the COVID-19 pandemic, according to a new report released from financial technology provider FIS. The FIS PACE Survey examines how UK consumers have altered the way they shop, bank and pay in response to the pandemic.
The report found younger generations are more likely to form new banking relationships, with nearly half of young millennials choosing not to return to their pre-pandemic banking habits. The most common reason cited overall for starting a new banking relationship was access to better benefits, while the top reason for 48 per cent of Gen Z was due to a pivotal moment in their life such as leaving school, getting their first job or starting university.
Just under 40 per cent of young millennials switched to gain greater access to products or services they couldn’t get previously, such as credit cards and mortgages, while seven per cent of those surveyed were driven to set up a new banking relationship as a result of an unpleasant customer experience.
Looking forward, the survey found access to real-time or faster payments were key for consumers in the next six months. More than one quarter (28 per cent) of young millennials want increased spending limits on credit and debit cards, while 22 per cent of Gen Z are looking to take out a loan.
“After an uncertain financial year for many, UK consumers are seeking a better experience from their bank, with greater access to products and services tailored to their needs,” said Silvia Mensdorff-Pouilly, head of banking solutions Europe at FIS. “As younger, more tech-savvy consumers enter the financial services market, banks must follow or risk losing engagement with an entire generation. Now more than ever, innovation among banks is critical to ensure a leading position in an increasingly competitive market.”
FIS partnered with IPSOS to survey 1,051 UK adults between the ages of 18 and 74 years old in July. The study’s purpose was to discover how the pandemic has affected consumers’ finances, how their behaviours have changed in response to COVID-19 and what changes consumers believe are most likely to endure.
Survey participants represent a cross-section of five generations and consumers from different countries in the United Kingdom. Virtually all respondents were banked. Compared with the general UK population, the sample is better educated and more affluent, the authors said.
