Nearly half (47%) of consumers would welcome the chance to use a ‘bank-style’ account, which would enable them to make and receive online payments but would not offer an overdraft facility, new research* from Fintech company Pockit shows.
Pockit’s study shows that consumers would use this type of account both as an alternative to their existing current account or because they are financially excluded. Research shows nearly one in ten (9%) customers have seen their application to a traditional bank for a current account with no overdraft facility turned down over the last two years, making it difficult for them to access the savings available from using direct debit facilities and shopping online.
The Financial Inclusion Commission estimates two million people are without bank accounts in the UK, forcing many to rely on cash – Pockit’s research shows around 6% of adults say that relying on cash means they miss out on the discounts available online and through direct debit.
However, it’s not just the financially excluded that would welcome a bank-style account – Pockit’s research shows many customers of traditional banks are dissatisfied with the level of service they currently receive.
Two out of five (38%) high street bank customers admitted they are worried about using their bank account for online transactions while one in six (17%) have experienced problems with direct debit payments. A further 12% of customers have fallen victim to fraud with money leaving their account while another 10% have experienced suspicious activity.
With three-quarters (75%) of consumers welcoming more competition in the current account market, Pockit has developed an alternative, no-nonsense approach to traditional banking.
The Fintech company, which provides a secure account open to everyone that can be used to pay in wages or benefits as well as to withdraw cash at ATMs, is expanding its service to offer account numbers, contactless cards and Direct Debits, during the coming months. It is particularly relevant for people who do not have bank accounts but can also help those who want additional accounts to use online or to help manage their cash more effectively.
Recent research has shown that traditional banks’ application processes and regulation are among the biggest barriers to financial inclusion, costing the financially excluded up to £1,300** a year and stopping millions from benefiting from improved budgeting and saving.
Virraj Jatania, CEO, and Co-Founder of Pockit said: “Consumers who’ve been rejected by traditional banks or poorly treated by them often end up outside the financial mainstream and having to rely on cash. Being financially excluded means missing out on the savings available through direct debits and online shopping.
“The no-nonsense bank-style account that we have developed is an ideal solution not only for the financially excluded but also for customers of traditional banks who are unhappy with their existing current account.”
Setting up a Pockit account takes two minutes and costs 99p and customers can fund accounts online or from a mobile or by cash at over 28,000 locations across the UK, as well as by debit card and bank transfer. For more details, go to www.pockit.com.