In a recent survey, 1,072 UK residents were asked how their finance and banking behaviour has been impacted by COVID-19 and how they feel about their financial future. The results revealed changes in spending habits, reduced incomes and new ways of managing money.
The data, carried out by SimpleUsability, show that 68% of UK banking customers would seek financial advice from sites like MoneySavingExpert or ask family members, before their own bank or app.
One third say they will be financially worse off as we come out of lockdown and 45% of those asked say they feel less secure about their financial future. When it came to managing money in lockdown, 28% used more credit and 21% say they used more of their bank’s overdraft facility.
“I have never used my overdraft or credit card, now I’m owing money on both.” Survey respondent.
Respondents were asked which types of government financial support they received:
But as 57% of respondents say they have changed how they manage their money during lockdown, 77% still did not look for any financial advice during the period. As we come out of lockdown, over half say they are unlikely to use cash to pay for goods and services but 70% believe we should not have a cashless society.
“Elderly and vulnerable people use cash and are not as confident with cards or online banking, so it’s not fair to the older generation.” Survey respondent.
When it comes to Open Banking, the survey results showed that only 20% of Brits say they understand what it means. When respondents were informed of the definition, there was a great deal of concern relating to data sharing, fraud and trust.
“It’s too dangerous as data from all my banks is too easily retrievable by a hacker. Instead of hitting one bank, a hacker can hit the servers of an open banking app and steal everything about a customer in only one hit.” Survey respondent
Judith Doherty, strategy director at SimpleUsability said, “As the financial sector scrambles to retain trust amongst their customer base post-lockdown, it’s important to note that half of consumers say they’ve changed how they manage their money. So how should the finance sector respond?
“Banking firms and personal finance product owners should grab this opportunity to help customers with spending and saving techniques, particularly as MoneySavingExpert currently has the monopoly on where people go for financial advice. Brands should be asking themselves, what can we do to make sure our customers come straight to us instead, and how can we support them across every touch point?”