Nearly 70% of the UK's adult population (approximately 30 million) either already manage all their day-to-day banking and mortgage with a single institution, or would be willing to do so if they could benefit from an offset banking offer, according to the latest ICM Research for Intelligent Finance (a division of Halifax plc).
The research showed a general inclination toward a single banking relationship, suggesting that, given the right circumstances and terms, British consumers at least are quite willing to hold all of their accounts and finance with one bank.
Offset banking means that the bank takes into account all the money a client currently has on deposit before charging interest on money owed on each account. In other words, interest is charged only after considering the aggregate total of all of the client's accounts.
Willing and able
Already, 51% of the consumers surveyed already use one single bank for all their day-to-day banking arrangements, and the numbers willing to do so rises to 68% when presented with the option of offset banking.
"The ICM research confirms the powerful consumer appeal of offset banking, and the rounded view it takes of people's finances," explained Intelligent Finance's CEO, Grenville Turner, in his recent speech at the Institute of Economic Affairs.
"Offset banking allows people to opt for the convenience of holding all their day-to-day banking arrangements with one bank without having to sacrifice value for money in the process," he added.
Intelligent Finance also claims to have noted a substantial increase in the number of new customers taking up more than one product or service with its banking operation from the start of their banking relationship.
Furthermore, an increasing number of existing customers are opening additional accounts with the same bank. Customers of Intelligent Finance are said to be averaging 2.2 product cross-holdings, compared their quoted industry average of 1.3 products.
The research also showed that convenience was also an important factor driving consumers' willingness to adopt a 'single relationship' approach to their banking and finances.
Nearly 60% felt that having all their accounts with one bank would make it easier to manage their day-to-day finances, and 50% agreed that holding their accounts with the same institution would give them a better overview of their finances.
Again, 50% agreed that it would be an advantage to be able to switch resources more quickly between their accounts, and that having less pin numbers to remember would be much more convenient.
Of those consumers who already use more than one bank, approximately one in four said they had taken out a product with another bank to take advantage of a better product offer.
There was, however, a significant difference between the sexes when it comes to 'shopping around' for better offers, with 33% of men but only 20% of women doing so.
The ICM Research surveyed a random selection of 1,006 adults (all aged 18 or over) by telephone between during April 2003. The interviews were conducted across the UK and the results were weighted to the profile of all adults.