Paper trumps online for better financial management - research
04 February 2015 | 5956 views | 13
As banks increasingly move from an analogue to a digital world, a new study by London Economics indicates that consumers are better able to manage their finances when they receive paper statements sent by post rather than online.
The study, conducted on behalf of the Keep Me Posted campaign, compared the responses and attitudes of two groups of people in a test scenario - one group was sent information by post and another group received the same information online.
The study found that people were twice as likely to correctly identify how much money was in their account if they received the statement by post (82% vs 32% who receive statements online).
The results also showed that 75% of those who received a paper statement were able to correctly assess the financial health of their account compared to 48% who received an online statement.
In addition, those who received paper statements were also better able to spot ways in which to improve their finances, such as reducing spending (90% compared to 77%) or switching to an alternative account which offered a better deal (90% compared to 85%).
While many respondents said receiving information in an electronic format helped them manage their finances better, the result of the behavioural experiment found the opposite was true.
In recent years, service providers such as banks and utility companies have increasingly migrated customers to online only statements and in some cases have reduced the frequency of paper bills and statements.
Michelle Highman, chief executive, The Money Charity, says: "It’s really important to be in control of your day to day situation, and so, whilst digital products will give you quick and easy access to your accounts, combining this with more traditional paper statements might help you with a more thorough monthly review of your finances.”
Hannah Poulton, heead of multi-channel communications for Principality Building Society, which has adopted Keep Me Posted’s six-point pledge, says that the evidence that people seem able to make better financial decisions if they have access to paper statements is "compelling".
She says: "We hope that Principality’s commitment to retaining paper-based communications for those who prefer them will help our Members continue to manage their money better and keep their finances on a sound footing.”