The lockdown from last year and the new restrictive tiers could radically reshape the financial high street as more consumers shun bank branches and free-to-use cash machines in favour of banking online and contactless payment.
Research conducted by software company ThoughtWorks for The Mail on Sunday shows that nearly a third of consumers have stopped using cash since the initial lockdown was introduced last March.
Furthermore, nearly four in ten people have not visited a bank branch since that date with 28 per cent saying they have stopped using cash machines altogether.
Nearly a third of consumers have stopped using cash since the initial lockdown in March
The research suggests that the rate of bank branch closures could ratchet up dramatically this year as the big banks respond to a sharp drop in demand for their high street services. It also points to a further reduction in the network of free-to-use cash machines.
ThoughtWorks’ research comes as the Government looks to bring in legislation that will help safeguard access to cash on the high street.
Ideas that are being considered include cashback services offered by retailers that do not require an accompanying purchase – and ‘shared’ bank branches run by an amalgam of banks rather than just one brand.
Phil Hingley, director of financial services at ThoughtWorks, says the pandemic has forced many people to ‘discover new ways to manage money and make payments online’.
He adds: ‘With hindsight, 2020 could well be the year when cash died.’ He says the change in consumers’ banking habits now ‘raises urgent questions’ for all the high street banks.
Research from Investec Bank supports ThoughtWorks’ findings. It says that nearly 80 per cent of people who opened a savings account last year opted for one that could be managed digitally. In contrast, only 14 per cent chose an account that could be used at a high street branch.
