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Press releaseSAVERS STILL PREFER BRANCH ACCESS DESPITE INTERNET BOOM02 March 2005
UNDER EMBARGO UNTIL 00.01 ON WEDNESDAY 2 MARCH 2005 Despite branch closures, soaring use of the internet and the general acceptance of the benefits that online accounts offer, National Savings and Investments’ (NS&I) latest savings survey reveals savers still prefer branch access [1].
Internet soars but flexibility is key Data [2] recording actual usage of different channels (CACI [2]), shows that use of internet/PC/TV-only accounts has soared since they first appeared. Total deposits have grown from £300 million in Q2 2000 to a huge £27 billion in Q3 2004, and market share from 0.1% to 5.4%. This represents the greatest growth of any channel in percentage terms. However, the CACI data also clearly shows a strong preference among consumers’ for branch access together with access to other channels (such as phone and internet). Between 2000 and 2004, the greatest growth in absolute market share and volume terms was for accounts offering such flexibility. The market share of branch based, multi access accounts rose from 38.1% in Q2 2000 to 59.7% in Q3 2004, and total deposits more than doubled from £149.5 billion to £306.3 billion. By contrast, total deposits in branch only accounts fell from £181.9 billion (2000) to £111.8 billion (2004). Their market share also dropped significantly from 46.3% to 21.8%. Telephone only accounts increased balances by 76.9% from £11.6 billion to £20.5 billion, and market share from 3.0% to 4.0%, but have been overtaken by internet only accounts. Traditions die hard Dax Harkins, senior savings strategist at National Savings and Investments, said, “These findings show that consumers are looking for the flexibility to manage their savings at a time and in a manner which is most convenient to them. Despite the boom in new internet based providers, savers do not seem ready to abandon traditional methods and move towards using a single remote channel. “Our research reveals that while 21% of savers intend to use the internet more over the next year, 18% will use branches more. This sends a clear signal to providers that savers value choice and new channels should complement not replace the old.”
Deciding factor A good rate of interest is the greatest influence (28%) as to how people operate their savings accounts. This is valued over security of savings (14%), personal service (12%) and ease of access (11%). The focus on security and service backs up the popularity of branch use, while high rates and ease of access are more associated with internet accounts. Similar research conducted by NS&I in September 2003 shows that these four influences, rates (22%), convenience (20%), security (11%) and service (11%), were also the most important factors then [3]. Gender differences
The influence of age Predictably, the highest preference for internet access is among 16-24 year-olds (23%), followed by 35-44 year-olds (21%) and 25-34 year-olds (20%). In contrast just 6% of 55-64 year-olds and 3% of over 65s prefer it. With their high preference for the internet, 16-24 year-olds put ease of access at equal importance to rates (23%) as influencing their choice but care very little about quality of service (3%). In 2003, convenience (24%) was more important to this age group than rate (19%) [4]. Over 55s are most inclined toward visiting a high street branch, (61% of 55-64 year-olds, and 70% of those aged 65+). Those aged 25-34 have the lowest preference for visiting branches, with 40% preferring it, however this is still the most popular channel. This age group has the greatest preference for telephone use (14%). Ends Notes to Editors National Savings and Investments is one of the largest savings organisations in the UK, offering a range of savings and investments products to 26 million customers. All products offer 100% capital security. Market share changes Q2 2000 to Q3 20042:
Source: CACI Further Information from the Savings Survey: Q: In which of the following ways, if any, do you prefer to operate your savings account?
Q: Which of the following, if any, has the biggest influence on the way in which you operate your savings accounts? (Feb 05) Q. Which is the most important reason for choosing a particular company to save with? (Sep 03)
Dax Harkins is available for interview and high-resolution photographs can be supplied. Contact the media team to arrange an interview or request photographs by e-mail. NS&I Media Team Mark Brooks 020 7348 9301 mark.brooks@nsandi.com [1] TNS phonebus survey of 505 GB adults aged 16+, 4-6th February 2005
Media team The numbers below are for media use only. Customers wishing to contact NS&I can find details here.
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