Banks could start to charge for various digital extras and even stop providing free current accounts
A report from PricewaterhouseCoopers (PwC) has suggested that banks could generate extra revenue by charging for various digital add-ons to your current account. These could include Facebook and Twitter notifications when your account goes overdrawn, smartphone bank accounts, and ‘virtual vaults’ for financial documents.
The report says that young people would be willing to pay around £4.20 a month for these services. If PwC is right, at least one observer believes this could be an opportunity for the big banks to stop offering free current accounts. The banks have longed to do this for many years.
That said, my hunch is that most banks will still be offering free accounts in ten years’ time. The current account market is pretty competitive and is set to become more so as new players enter the market. Given that background, any bank that withdraws free banking will inevitably lose customers in my view.
And anyway, digital banking is already here. You can manage your bank accounts online and you can also budget online with tools such as lovemoney.com’s MoneyTrack. I wouldn’t be surprised if one of the newer banks offered services such as Facebook notifications for free as a way to win market share.
So there’s no need to panic. Facebook has changed the world in many ways, but I don’t think it’s going to end free banking in the UK.
More: Check out lovemoney.com’s Facebook page | Why banks are good to us