It wasn’t so long ago that bank branches were leaving the high street – some even became wine bars. New research reveals that today’s youth predict a bright future for banks on the high street – although the vast majority (79%) believe that their relationship with banks will be fundamentally different in ten-year’s time. Instead of looking after our cash and sending us statements, Britain’s student population thinks that banks will be primarily responsible for looking after our personal data (27%), supporting money education (23%) and validating instant payments in an online world where consumers have just one password and ID.
It is a time of year when another generation of students prepares to graduate from university life and start the world of work. Most of them have had their first experience of living away from home, managing their own finances and they will each graduate with an average debt of £50,000. Given the extent of student exposure to debt and money matters at a young age, ThoughtWorks asked young people to imagine what Britain would be like by 2030 and to consider how banking would change during their working lives.
Aside from the belief that banks will look after a customer’s data rather than their cash (27%), students also believed that they will no longer receive financial statements by 2030 (35%). Instead, they predict that by 2030 they will access all their financial information from a single online hub (35%) – and that they will have just one password and ID for all their online purchases and payments (19%). Students also believe that AI will play a major role in ordering things as and when they are needed – and some believed drones and robots would have a role to play in the bank of the future (16%).
In the age of the sharing economy, young people are also significantly more likely to predict a big future for peer-to-peer financial services, where people lend and borrow from one another. Students were more than twice as likely than today’s workforce to believe this would be widespread in Britain by 2030 (31% versus 15%).
Given the view of a digitised world in 2030, it would be natural to presume that high street banks may disappear. One of the most surprising findings from the ThoughtWorks study was that young people believed banks would stay on the high street – in fact, they believed this much more strongly than the older generation that has grown up through an era of bank consolidation and ongoing branch closure programmes. Whereas people over 45 predict bank branches will leave the high street by 2030 (47%), only 18% of today’s students share such a bleak view. Young people are far more likely to say that banks have an important future on the high street but they will play a different role. Overall, 23% of students say bank branches will transition to become community hubs for financial education, data safety and will also have a social role to play as a place for community groups to meet.
Phil Hingley, Director of Financial Services at ThoughtWorks UK commented: “For young people, mobile devices shape the way they live their lives, not just as a communication tool but for all types of social and professional interactions from travel and tax to bookings, banking and beyond. Young Brits like the allure and convenience of using products and services from cool tech brands but they also recognise there is a place for solid, safe brands – like banks – that can be the junction that stores their data they use, validates their ID and the enables the payments they make to a wide range of online brands and retailers.
“In the new cashless age of Britain in 2030, there will be a greater need for data security and safety. The future will call for banks to revisit those concrete pillars and solid doors that characterise many of its traditional branches. There will be an intensified need for reassurance and safety. Consumers won’t want to give their security information to multiple brands. They will want a single hub – a single, solid and trusted brand that can verify the consumer’s identity to online retailers, look after their salary, handle their payments and in doing so take cost out of the supply chain. The values that underpin the bank of the future could look remarkably similar to the bank of the past – the difference is that data will replace physical currency as the commodity they are trusted with and move around.”