Over 30 percent of Romanian consumers increased their usage of contactless payments, at the expense of cash, according to the findings from the latest “Financial Pulse Survey” conducted by McKinsey & Company. This trend is likely to continue, as over 40 percent of respondents intend to reduce or stop using cash altogether in the next months, according to Business-Review.eu.
Moreover, when interacting with their banks, Romanians are migrating fast to digital channels, as around 20 percent of them expect to use their mobile devices or desktops more often to access banking services as the crisis ends, compared to nearly 10% across European countries (albeit from a different base).
As almost 50 percent of consumers in Romania have experienced reduction in income and savings during the last period, thus revealing a financial fragility, according to the initial set of data extracted by McKinsey & Company, we expect Romanians to change their behaviors vs. spending and saving in the new context. The main reason is the likely economic recession as most of the questioned Romanians (64 percent) stated they are concerned about it, while 45 percent prefer to be cautious regarding the spending and trying to build a cash position. Other reasons for reduced household spending are the job insecurity and the potential healthcare costs for them and their families.
Therefore, given the current uncertainties, Romanians are prone to adopt behaviors that are more cautious. Even though cash (including current bank accounts) is by far the main mean of saving for Romanians, with over 50 percent today, bank deposits and other financial products (asset management, life insurance, etc.) allocation is expected to increase by 4 and 5 percentage points, respectively.
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