second part of this blog, I examine how banks can improve their offerings for customers travelling abroad.
Whilst traditional banks may think that consumers use neobanks abroad and then return to their traditional bank once home, the research paints quite a different picture. It indicates that 18% now use their neobank as their main current account, and just
under a third (30%) use it as a secondary account.
Traditional banks which continue to impose higher foreign fees and exchange rates may be leaving themselves vulnerable to customers switching to a newer digital-only banking alternatives.
Opportunity for banks to improve
The data from recent research also identifies clear opportunities for the traditional banks to improve their offering for customers who are travelling abroad. A lack of clarity over fees and the high rates more generally, have been highlighted as concerns
amongst many consumers in this research.
However, there are simple ways that banks can improve their customers’ experience whilst in a foreign country. For example, more than a quarter (28%) of consumers would like their banking provider to offer real-time currency exchange rates.
This feature is commonplace within neobanking apps, and there is a significant opportunity for traditional banks to follow suit and provide the same offering through their own mobile apps. In addition, 29% of 25-34-year-olds highlighted that they would like
the ability to pay in GBP or local currency from different ‘pots’ held separately in their account.
One in five (20%) also want the ability to access their bank’s customer service whilst making payments abroad. Improvements to banking apps that allow real-time messaging with customer service representatives can support timely and cost-efficient communication
between customers and their bank, providing additional support and reassurance whilst abroad.
Similarly, 19% would like both real-time spending updates sent directly to their phone, as well as real-time advice on the most cost-effective ways to pay (18%). Both services could be provided through enhancements to a bank’s mobile app features.
This demand for better banking services provided through technology was further evidenced in the research, when consumers were asked if their banking partner was keeping up with technology quickly enough. Surprisingly, despite widespread digital transformation
of the sector, only 63% of consumers believe this to be true. Additionally, 13% of consumers surveyed also admitted to be currently looking to switch banking providers.
As we enter the summer months and foreign travel increases, there is a real opportunity for banks to provide better clarity and support to their customers whilst abroad. The traditional banks seemingly have the most work to do. But small changes to their
digital offering, to make foreign spending easier and clearer to understand, could improve their customers’ experience whilst abroad almost instantly, without having to review their foreign spending charges.
Meanwhile, even though neobanks continue to lead the market on low foreign transaction fees, they also have their own challenges. They must still ensure their wider offering is attractive enough to convert the consumers who only use their services whilst
abroad, into full-time active current account users back at home. Understanding the role that digital services can play in making the customer experience better abroad and at home, will be key for banks who want to remain competitive in this challenging market.