Paper bank statements make it easier to manage finances, study says

http://www.theguardian.com/money/2015/feb/03/paper-bank-statements-easier-finances-online

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Consumers are able to better manage and improve their finances when they receive paper bank statements sent through the post rather than just accessing their accounts online, according to the results of a behavioural study published on Monday.

The research exercise – thought to be the biggest of its kind – by London Economics for the Keep Me Posted campaign, looked at the effectiveness of paper versus online statements on consumer behaviour.

The results suggested that people were twice as likely to correctly identify how much money was in their account if they received the statement by post (82% v 32% who received statements online).

The Keep Me Posted campaign – a coalition of more than 70 different charities and consumer groups – is fighting to protect the right of consumers to receive traditional paper statements and bills.

For the study, 3,600 adults were initially invited to participate, and half then sent a mock bank statement and a notice of changes to overdraft fees by post, while the other half were sent the same information by email. In the end 2,399 consumers took part in the entire exercise, answering detailed questions about the mock account. Respondents were told they would be entered into a cash prize draw if they answered the questions correctly, creating a setting where they had to undertake tasks that were in their own financial interest.

The research found that consumers who received statements and other financial information by post were better able to understand the information given, act on it and then make better financial decisions as a result than those receiving the same information electronically.

Account holders who received paper statements were also better able to spot ways in which to improve their finances, such as cutting spending (90% compared to 77%).

A Keep Me Posted spokesman said: “It was hard to establish why this was the end result as this was one of the first studies of its kind. The experiment aimed to establish what people’s natural reaction to receiving paper or online statements might be, particularly as providers are pushing online to consumers so frequently. The evidence has shown that for whatever reason people do respond to paper more – possibly as it seems more official and email has often seemed quite disposable.”

Judith Donovan CBE, chair of the Keep Me Posted campaign, urged consumers to take greater care when managing finances online. She said: “People’s understanding of the information they receive has important implications on their ability to manage their money effectively. The findings confirm that receiving paper correspondence may help people manage their finances better. It can help them avoid going overdrawn inadvertently or spending beyond their means.”