Brits turn to bank branches to help manage rising cost of living

The research found that a quarter (25 per cent) of UK consumers are more likely to visit a bank branch due to the rising cost of living and that depositing and withdrawing cash are the key drivers for visiting a branch more often.

It also found that cashback on monthly bills has overtaken interest rates as the most attractive perk offered by a bank account.

While the COVID-19 pandemic has accelerated the transition to online banking, the cost of living has seen an increasing number of households turn to cash as a budgeting tool as many struggle to cope with price rises.

Over a third of UK consumers said depositing (36 per cent) or withdrawing (35 per cent) cash was why they were increasingly likely to visit a bank branch. Meeting with a bank manager to discuss personal finances (38 per cent) was the top reason why individuals said that the cost of living has made them more likely to visit a branch.

Almost a fifth (18 per cent) of respondents had visited a bank branch in the last week compared with 13 per cent in 2021. Similarly, a quarter (25 per cent) of UK individuals had visited a bank branch in the last month, up from 22 per cent in 2021.

Karim Haji, EMA and UK head of financial services at KPMG, said while the move to digital banking is desirable for most, the research uncovers an important truth: bricks and mortar bank branches are vital for an increasing number of people who are struggling to manage their personal finances.

“The cost of living crisis has seen individuals and households who previously didn’t need to budget, now having to,” he said.

“During this challenging economic period, banks must recognise the importance of having access to a bank branch. The banking sector is already exploring innovative new ways to enable customers to access services in person — such as through multi-bank hubs — today’s research demonstrates just how important it is that work happens at a pace.

“Banks should also note the shift away from rate chasing in favour of perks such as cashback on monthly bills.”

According to the research, 39 per cent of individuals said that cashback on monthly bills was the most attractive perk offered by a bank with competitive interest rates being the second most popular perk (37 per cent) down from 51 per cent last year.