High street banks lose £100bn in deposits as UK savers shift to online rivals | Banking

Figures, more customers from traditional lenders to online banks and building societies, high street banks throughout the UK, lost savings of £ 100 billion.

KPMG experts, new Challenger banks, expert lenders and building societies, including competitors’ customers with higher savings rates away from banking groups, he said. He added that traditional banks fell from 84% to 80% in 2019 in 2019.

In the meantime, the banking sector experienced a combined decrease in a total of £ 3.7 billion in the profit before the total tax last year and marked the first major decline since the rebound after the pandema.

The average equity of the sector, the basic performance measure, is expected to decrease more than one -third to 13% from 13% to 2027 in 2023. This is equivalent to a decrease in £ 11 billion in annual profits.

KPMG warned that banks are under pressure to adapt to major changes in the sector, including increasing competition and increasing costs.

The flight of customers from Hight Street loans follows a period in which banks are accused of “emphasis ından by offering PalTry refunds for saving providers.

Managers from Big High Street names such as Lloyds Banking Group, Natwest, HSBC and Barclays were taken to meetings in 2023 with the concerns that the interest rates for mortgages and loans were far behind.

These concerns led to a discussion to compensate for the costs of consumers during the cost of life crisis whether the government would impose a fall tax to banks. Similar policies have been introduced in the Czech Republic, Lithuania and Spain, but British politicians have so far refused to follow the case.

Peter Westlake, the partner of KPMG UK’s banking strategy team, said, “Banks face lower growth that demand transformation, a higher cost -effective environment. While profitability expects to be widely intact this year, the whole sector needs to show how they are prepared for the upcoming difficulties.”

According to KPMG’s report, bank costs increased by 6% in 2024 and the bank will be able to put more pressure with the productivity of the workers.

Weslake suggested that banks could turn to less traditional methods to increase profits, including embracing artificial intelligence. “The winners will be the ones that go beyond tactical cost reduction and deal with market winds that proactively through business model transformation,” he said.