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Press release

19 Nov 2019 London, GB

Cashless society benefits financial crime prevention but raises concerns with inclusion and data privacy

LONDON, 19 NOVEMBER 2019. Cash is no longer king and will not be the preferred method of payment by 2030, according to an EY poll on digital and cash payments.

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EY Global

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  • Majority believe financial institutions should make greater investments in cybersecurity to protect financial data

Cash is no longer king and will not be the preferred method of payment by 2030, according to an EY poll on digital and cash payments. The survey of financial services professionals indicates that while all respondents believe the end of cash is near, there are concerns over financial inclusion, data security and privacy that need to be ironed out.

The real cost of a cashless economy

Digitizing all transactions could lead to greater accountability and reduce the occurrence of black-market transactions, with respondents citing the top benefits of a cashless economy being convenience (39%) and financial crime prevention (36%). However, concern was raised over the impact on financial inclusion, where vulnerable, underserved and unbanked communities may face barriers integrating into cashless economies.

Thirty-six percent of all respondents cited social exclusion as the most negative impact of a cashless society. Of this figure, 100% of respondents based in Asia, the Middle East, Africa, Latin America and Australasia cited this as the most negative by-product, versus only 38% of European-based respondents and 33% of respondents based in North America. Other areas of concern included:

  • Increased potential for cyber risk (20%)
  • Potential for mass outages (20%)
  • Greater government control (14%)
  • Costs faced by the business sector (8%)

Banks responsible for protecting data

Respondents indicate that getting authentication right for digital payments is critical to overcoming the trust barrier that is deterring some from fully engaging in a cashless economy. The majority (52%) believe that financial institutions can do more to reassure consumers that their data is protected through increased investment in cybersecurity protocols.

Jan Bellens, EY Global Banking & Capital Markets Sector Leader, says:

“As we enter this new monetary world, financial institutions play an integral role in the protection of personal financial data. Investing in greater cybersecurity measures and educating consumers on the safe use of digital payments will help build the trust necessary for more widespread adoption of cashless payment options.”

The cashless revolution is coming, eventually

While digital payments are on the rise, going completely cashless is not going to happen overnight, according to the survey. An overwhelming 96% of respondents believe that digital payments will be the dominant form of payment in 2030. Of that figure, 59% believe mobile payments will be the most common, with 31% choosing biometrics, including facial recognition, fingerprinting and retinal scanning.

However, when asked how much cash they were carrying at the time, just under a quarter of respondents (23%) — largely based in Europe — had gone completely cashless. The majority of respondents (49%) were carrying up to £50, and more than a quarter (27%) — including all respondents based in Latin America and Africa — stated they were carrying more than £50.

Consumer buy-in is critical, but regional disparity may create speed bumps 

More than a third (36%) of respondents believe the most effective way to achieve a cashless economy will come via consumer buy-in, but broken down by region, the results show a more complex picture.

Survey participants based in Asia stated that industry bodies and governments (36%) should address concerns around trust and security, as well as regulate the practices of non-banks such as peer-to-peer (P2P) lenders and cryptocurrency traders.

On the other hand, the majority (45%) of European-based respondents said consumer adoption is the most important factor, hinting that while greater options may become available via PSD2 and Open Banking, the responsibility will rest on the public to embrace new forms of payments.

Bellens adds:

“Markets around the world are transitioning to cashless transactions at different rates as regulatory discussions, consumer buy-in and technologies vary by region. Despite these differences, cashless transactions are increasing, and financial institutions have an opportunity to work closely with businesses, FinTechs and government bodies to provide payments that are efficient and safe, while supporting financial inclusion.”

For more information on the transition to a cashless society, visit: ey.com/endofcash.

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Notes to Editors

About EY

EY is a global leader in assurance, tax, transaction and advisory services. The insights and quality services we deliver help build trust and confidence in the capital markets and in economies the world over. We develop outstanding leaders who team to deliver on our promises to all of our stakeholders. In so doing, we play a critical role in building a better working world for our people, for our clients and for our communities.

EY refers to the global organization, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients. Information about how EY collects and uses personal data and a description of the rights individuals have under data protection legislation is available via ey.com/privacy. For more information about our organization, please visit ey.com.

This news release has been issued by EYGM Limited, a member of the global EY organization that also does not provide any services to clients.

Poll methodology

EY conducted a poll on-site at Sibos 2019 in London on the topic of digital and cash payments. Responses were collected from a total of 129 conference attendees, including representatives from financial institutions, regulators, technology providers, consultancies, among others, who work or operate in Europe, Asia, North America, the Middle East, Africa, Latin America and Australasia. Topics including the benefits and drawbacks of a cashless economy, how to reach and shape a cashless economy and data security.

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