British households could pocket an extra £3,500 over a decade by using digital banking tools, according to Lloyds Bank research. The findings suggest that letting banking apps send alerts about bills or nudges on money management can unlock significant savings.
How Digital Tools Can Help
The study, which involved economic modelling by Professor John Gathergood from the University of Nottingham, calculated potential financial gains for UK households over a 10-year period. It found that an estimated £100 billion could be made available if digital banking tools were widely adopted, equating to around £3,500 per household.
These tools include budgeting alerts that warn users before accounts go into the red, and notifications highlighting better mortgage or credit card deals. The biggest gains could go to those with excess cash who invest it, particularly benefiting mid-life savers or mortgage holders.
Lower-Income Households Benefit Most
Lower-income households stand to gain the most as a proportion of their income, through easier debt management, access to credit, and better everyday money management like tracking bills. The research comes amid economic uncertainty from the Middle East energy shock, with banks like Lloyds forecasting worsening growth, inflation, and unemployment.
Jas Singh, head of consumer relationships for Lloyds' retail bank, noted that he has not seen a spike in customers seeking help about jobs or finances, unlike during Covid-19 or the cost-of-living crisis. "Some people will contact us to say, how do I manage my bills better... but I haven't seen a really big surge of more people cancelling subscriptions," he said, though he highlighted "people saving a bit more."
Balancing Help and Intrusion
Mr Singh stressed the need for a "fine balance" between helping customers and being overly involved. He said suggestions should be personalised and relevant, avoiding invasive notifications. "In my experience it works best to make suggestions to people which are contextual to them and their life circumstances. I think if the banks were giving you notifications to say 'I can see you've just spent on a coffee at Costa', I'm not sure that's the role society expects banks to play. 'How much have I spent on coffee last month?' – I think that's a more relevant place to be in."
