It’s younger people, not older, who are visiting bank branches regularly - this is why

Younger people are more likely to visit their bank or building society branch in-person than older customers, surprising new research has found - and it’s for similarly unexpected reasons.

More than one in three Millennials (35 per cent) and Gen Z (34 per cent) customers said they have visited a branch within the past month, compared with only around one in five Gen X (21 per cent) and less than a quarter of Baby Boomers (23 per cent).

The research, from tax and consultancy firm RSM UK, highlights the enduring appeal of visiting the local branch at a time when the government has urged people to have some cash on hand in case of emergencies or tech breakdowns, such as the recent outage affecting some banks which left shoppers unable to pay for goods digitally in some cases.

In addition, the footfall data comes after a period of closures of high street bank branch closures over the past few years - with some brands now actively pledging to keep their branches open to differentiate themselves.

RSM say that despite younger generations being more responsible for visiting branches, it is still traditional banking activities which lead them there: Paying in cash (29 per cent), withdrawing cash (22 per cent) and paying in a cheque (17 per cent).

At the other end of the scale, fewer than one in ten visited to get help with online or mobile banking (8 per cent) or to open an account (7 per cent).

But that doesn’t mean tech isn’t playing a part.

Among Gen Z (aged 18–24) respondents who had visited a branch, more than four in five (82 per cent) said they had previously tried to complete the task online, by app or phone but couldn’t do so.

The research, carried out by Censuswide, further highlighted than 4 per cent of people have never been in a branch of their bank, and more than 4m people now have their account somewhere with no physical branches at all.

Invest at least £100 in Stocks or ETFs of your choice. Get fractional shares worth £50!

Terms and conditions apply.

Go to website

ADVERTISEMENT

Invest at least £100 in Stocks or ETFs of your choice. Get fractional shares worth £50!

Terms and conditions apply.

Go to website

ADVERTISEMENT

Hugh Fairclough, partner and head of financial services at RSM UK, said: “It would be easy to assume that younger, digitally savvy customers have little use for bank branches, but our research suggests the opposite. Gen Z and Millennials are more likely to have visited a branch recently than older generations, showing that physical banking continues to have relevance alongside digital services.

“What’s particularly interesting is what is bringing customers through the door. Cash deposits and withdrawals remain the biggest drivers of branch visits, alongside paying in cheques.

“There is clearly still demand for face-to-face banking, including among younger customers, but the purpose of the branch is evolving. While some banks continue to invest in new branches, including HSBC and Barclays, the challenge will be determining which services customers genuinely value in person and where branches fit alongside continued investment in their digital offering.”

Meanwhile, separate new research from the Post Office shows that digital payment outages - such as that which occurred in October when Google Cloud services shut down - cost high street retailers an average of £255 for every hour an outage lasts - and around one in four are forced to turn customers away.

Close to a third of UK adults (29 per cent) have been unable to pay in-store over the past year because a retailer did not accept a payment method they could use, with around a fifth of those (21 per cent) saying it was because the retailer did not accept cash.

The Post Office is urging retail stores to consider doing so, both to avoid losing custom and also in the wake of the government urging households to keep some cash on hand.

“A payment outage can disrupt trading in seconds, resulting in customers being turned away and sales lost,” said Ben Hunter Woollard, head of banking at Post Office. “With the Government encouraging households to keep some cash available for emergencies, retailers should also consider how they will keep serving customers if digital payments go down in emergencies. If cash usage is being encouraged, so should its acceptance.”

Helen Dickinson, chief executive at the British Retail Consortium, added: “While businesses remain free to decide which payment methods they accept, cash remains a viable option to support consumer choice and business resilience.”