More than half of all UK consumers have at least one bank account they no longer use, but have not yet closed. The research, commissioned by CREALOGIX, found that banking customers are also increasingly opening new accounts with challenger banks because they offer personalised features that consumers are looking for.

New research from digital banking software provider CREALOGIX has found that UK consumers are frequently opening new bank accounts without closing the ones they already have open. 57 per cent of respondents admitted to having at least one bank account they have not accessed in the last 3 months, while 1 in 4 Gen-Zs and Millennials stated they had 2 or more accounts that are currently not in use.

The research also found that consumers are opening new accounts with “challenger banks” because of the features and perks that come with them. 46 per cent of UK consumers agreed they would be more likely to try out a new bank account if it provided personalised features based on preferences and lifestyle, jumping to over 70 per cent among Gen-Zs. This has led to 1 in 4 Millennials and Gen-Zs adopting digital challenger banks, such as Monzo, Revolut or Starling. The research discovered the most desired mobile features are:

• The ability to immediately freeze and unfreeze cards that have been lost or stolen – almost half of Gen-Zs state this feature would encourage them to open a new account.
• A further 40 per cent stated that having a visual summary of spendingis desirable
• A third wanted a prediction of whether they were on course to run out of money before their next payday.
• Instant PIN changes, the ability to split the bill between friends, and the ability to trade cryptocurrency were also attractive features to Gen-Zs opening new accounts.

Traditional banks are losing out to these challenger banks as they are not in touch with what consumers want from their banking services. The report highlighted that less than 1 in 10 consumers recall being asked anything about their lifestyle or purchasing preferences over the past year. Moreover, the study found that over half of consumers would be happy to pay for features and perks tailored to their lifestyle and habits, with two thirds of Gen-Zs stating they would consider paying for a premium account with features such as cash back on shopping, free worldwide travel insurance, and loyalty points or air miles.

Jo Howes, Commercial Director at CREALOGIX, commented: “The fact that nearly 61 million bank accounts remain open but unused shows an interesting and gradual shift from our traditional banking brand relationships and loyalty, which is hard to measure using current metrics. While many of these accounts will not be considered dormant using the traditional definition, it does not mean they should be ignored – their customers are very gradually leaving. And they are leaving because it is easy to open new accounts and there is no risk involved in opening a new account without “switching”. Banks look at switching statistics to measure success, but this is the wrong measurement.

“Banking providers are really missing a trick by not tuning in to what consumers want from their banks. Engagement is directly driven by understanding what features and services customers are looking for. We are seeing greater adoption of challengers and neobanks because they are putting the consumer first – offering convenience and services to make their lives easier.”