Is the posted paper bank statement a thing of the past?

The once-a-month paper bank statement could potentially be hading for the shredder as younger people opt for banking apps and digital budgeting tools instead.

Fewer than 10 per cent of customers of the smartphone bank Monzo, nine in 10 of whom are aged 18-49, have ever downloaded their bank statement as a PDF, while younger customers of the traditional high street banks are increasingly going paperless too.

Close to seven in 10 customers of Halifax, part of Britain’s biggest banking group Lloyds, aged 25-29 had gone paperless or partly paperless, the bank said, while 62 per cent of those aged 18-24 had done the same.

Destined for the shredder? High street banks Halifax and HSBC report more customers are going paperless as younger people manage their money through mobile banking apps

The figures for Lloyds Bank were fairly similar, while 64 per cent of HSBC customers registered for online banking received their bank statements entirely over the internet rather than through the post.

Although only four in 10 of all HSBC customers had gone paperless, suggesting those who are older or who don’t bank online remain attached to the routine of receiving their statement once a month, the percentage of paperless consumers appears to be rising.

The accountancy firm EY estimated in March 2018 that 32 per cent of banking customers were paperless, with the number of paper documents sent out between 2016 and 2018 by banks falling 7 per cent.

Banks, which sent out an estimated 482million documents in 2017 according to EY, are increasingly turning away from automatically sending customers their statements through the post.

NatWest in January this year stopped sending them out by default, but customers could still request them, while some other banks require customers either to register for online banking or go fully paperless if they want to benefit from switching bonuses.

NS&I will no longer send out Premium Bond prizes through the post after next March, while the student loan system has also gone paperless

NS&I will no longer send out Premium Bond prizes through the post after next March, while the student loan system has also gone paperless 

Last month Treasury-backed National Savings & Investments announced that millions of Premium Bonds customers who still received their winnings in the post would instead have to provide their bank details online by next March, rather than receive prize cheques.

Is the posted paper bank statement a thing of the past? 1

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Do you still receive your bank statements in the post?

Savers have been informed of their winnings through the post since 1964, while Britain’s student loan system also went paperless from July.

The move saves banks money and also cut down on the environmental impact of printing millions of sheets of paper every month, but the paperless trend also reflects the changing habits of younger customers more used to banking online or on their smartphone.

Britain’s biggest banks have poured resources into revamping their online and mobile banking offerings under pressure from digital challenger banks and money management apps.

A survey of 2,000 people by the comparison site Finder found the ‘range of digital services’ offered by a bank was judged to be the feature most valued by Britons, even more than security.

Monzo, which has signed up millions of users and has seen many of its features like real-time card transaction notifications and breaking down spending into categories copied by more established high street names, said customers were far likelier to use in-app budgeting features than base their spending and saving on a paper statement issued once a month.

Comparison site Finder found the range of digital services offered by a bank was the feature considered most valuable by Britons

Comparison site Finder found the range of digital services offered by a bank was the feature considered most valuable by Britons

It said users would set budgeting targets within its app, divide their salary into chunks or round-up their savings into pots. 

Many of its customers may also use it like a prepaid card to track their spending, loading money onto it from their primary account.

Its latest annual report found its average customer had £357 in their account at the end of this year February, while a separate survey from Finder found 47 per cent kept less than £1,000 in a digital-only bank account and three in 10 less than £100.

HSBC launched a feature last October on its mobile app which showed customers how much money they had left after their scheduled direct debits and standing orders had been paid out.

Fewer than 10% of customers of smartphone bank Monzo had ever downloaded their bank statement. Instead the bank pointed to money management features like one which let customers sort their salary into different categories

Fewer than 10% of customers of smartphone bank Monzo had ever downloaded their bank statement. Instead the bank pointed to money management features like one which let customers sort their salary into different categories

350,000 customers had signed up a month after it launched and it now has 1.1million users, with usage increasing 25 per cent during the coronavirus lockdown as many turned to online banking for the first time.

And open banking, an initiative which enables Britons to consent to their financial data being shared, has also helped spawn a raft of budgeting apps which let people view all their bank accounts and credit cards in one place. 

Some 2million people had used open banking-enabled products by the end of last month.

HSBC rolled out a feature last October which let customers see how much money would be left in their account after upcoming direct debits and standing orders were taken out

HSBC rolled out a feature last October which let customers see how much money would be left in their account after upcoming direct debits and standing orders were taken out

Pauline van Brankel, the chief product officer at Yolt, an open banking app created by Dutch bank ING with around 60,000 users, said: ‘Paper statements used to be popular for people looking to review their finances on a regular basis and to track their spending and saving habits over time.

‘However, there are now many free digital tools and services available, which enable you to access this information much more efficiently, at any time of the day.’

Two in five Yolt users used the app to set monthly budgets across various categories, including groceries, travel and meals out, she said.

But while receiving a bank statement once a month and setting a budget on the back of it may be a thing of the past, Britain is unlikely to be heading for a completely paperless future, at least not any time soon.

68% of Halifax customers aged 25-29 had either gone fully or partly paperless when it came to their bank statements

68% of Halifax customers aged 25-29 had either gone fully or partly paperless when it came to their bank statements

Many find themselves keeping paper documents filed away, even if they might not want to, in case they are ever needed for proof of identity or address when making an application.

One person on the social media website Reddit summed up the attitude of many when This is Money asked users if they kept their paper bank statements around.

They said: ‘Nobody under 40 uses it for budgeting but they are essential when you need proof of address because most places won’t accept seeing it in the banking app on your phone or one you’ve printed yourself, not that it’s possible for them to tell the difference if your bank provides a decent PDF statement.’

However, Pauline van Brankel hoped this might change if the use of open banking, which can see data shared with credit reference agencies and lenders, continued to grow.

She said: ‘Open banking technology means that consumers for the first time have real control over their own financial data and it’s hoped that as the initiative grows, we will reach a point in time where users can access their entire financial footprint, such as their mortgage, pension, savings and loans, in one central place.’

And it’s not just statements…

The boom in contactless payments might be putting paid to the printed receipt too. 

Four in five people made a contactless purchase last year and contactless card payments accounted for 21 per cent of all payments, according to the banking trade body UK Finance.

This was before the coronavirus pandemic saw the contactless limit increased to £45 and the Government encourage contactless payment methods where possible.

Those in a hurry might be less likely to wait to pick up their receipt, and the trend has also benefited digital alternatives.

Flux, a platform which sends receipts directly to the banking apps of customers of Barclays, Monzo and Starling, said it had delivered 2.5million receipts by the end of September, having delivered just 30,000 between 2016 and the start of last year.

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