10 years ago, you’d be forgiven for thinking that physical media like vinyl, CDs, and DVDs had gone the way of the dinosaur. Yet, something strange is happening. In 2023, 6.5m vinyl records were bought in the UK, the largest number since 1990. 

Even the humble tape is having a moment, with sales surpassing six figures for the fourth consecutive year in 2023. Much of this demand is being driven by Gen Z consumers, many of whom weren’t even born when the first iPod went on sale in 2001. 

‘How’s this relevant to building societies’ you might be asking. Well bear with me. In recent years, we’ve seen several financial organisations scrapping their passbook savings accounts, considering them an expensive relic of a pre-digital era. But, keeping in mind what we’re seeing in other industries, is it time for a re-think? 

Assessing the demand for passbooks

Recent research by the Yorkshire Building Society revealed that far from being redundant, there is still significant demand for passbooks, with over half a million of its members using one in branch in 2023. 

And, just as the physical media boom is being driven by younger consumers, the same can be said for passbooks. The Yorkshire Building Society research shows that 16% of people still hold passbooks, but this rises to 27% for people aged 18-24. 

Elsewhere, research from Leeds Building Society shows that 58% of savers aged 16-44 would prefer to use passbooks to manage their accounts. Newcastle Building Society, which offers passbooks to all its customers, has reported a take-up rate of around 54%. It also issued around three times as many passbooks last year as it did in 2021.

What’s behind the resurgent interest in passbooks? 

While retro-nostalgia may play a role in the resurgence of physical media, there is more going on when it comes to physical savings records. With the cost-of-living crisis biting, many bank customers are looking for ways to better manage their money and budget. 

Last year, UK Finance reported that cash payments rose by 7% to 6.4 billion payments in 2022, the first rise in a decade – attributing some of this rise to fears about inflation and the rising cost of living. Passbooks offer a similar way to help consumers feel connected to and in control of their savings. And, for older consumers without the ability to access online banking, a physical log of incomings and outgoing is particularly important. 

What does the future look like for passbooks? 

The simplicity, longevity and continued popularity of passbooks suggests that they’re here to stay, though we do expect to see continued innovation to keep them relevant in 2024 and beyond. 

Many passbook holders use them in tandem with digital banking tools, so integration between passbook savings accounts and personal finance apps will continue to be a focus. This will make it easier for account holders to set financial goals and track spending, but also to receive personalised recommendations on how to save more effectively. 

Modern printing methods will also continue to bolster the security of savings passbooks through techniques like watermarks, holograms, special inks and microtext – making this already safe banking method even more secure. Who knows, maybe we’ll even see technology like radio-frequency identification (RFID) tags make their way into passbooks in the future, reducing the chance they get lost and have to be re-printed. 

Driven by increasing demand for sustainable products, from younger consumers in particular, we also predict there will be more interest in sustainably produced passbooks. To an extent, this is already underway, with some building societies moving away from plastic passbook wallets. And as more banks and building societies scrutinise their Scope 3 emissions, we expect to see a continued drive towards sustainable materials and printing practices. 

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