Majority of UK consumers ready to try new challenger banks

Majority of UK consumers ready to try new challenger banks

Four-in-five UK consumers would trust a challenger bank with their money, and over half think that a reliable IT infrastructure would give the newcomers a competitive advantage over more-established rivals, according to research commissioned by Fiserv.

The survey, conducted among 2000 UK consumers, found that the British public are growing increasingly comfortable with the use of online and mobile channels to manage their finances.

More than nine in ten (94%) bank users log on to their online banking at least once a month, while three quarters of respondents (75%) check in once a week. More than half (56%) of current account holders use a banking app every week, with one in ten (10%) doing this on a daily basis.

Travers Clarke-Walker, managing director, Emea, international group, Fiserv, comments: “The reality is that digital services are becoming increasingly important for consumers when it comes to their banking, and existing providers as well as new entrants must ensure a seamless experience across channels to remain competitive in the marketplace.”

The UK's Competition and Markets Authority recently announced a full-scale investigation into personal current accounts and SME banking, amid concerns that that regulatory barriers and limited transparency in banking products impeded the opportunities for new entrants to gain market share from the country's biggest banks.

The CMA has the power to order a break up of banks considered too dominant, as well as enforcing new rules to improve competition in the sector.

For the 30 or so firms that have recently applied for authorisation to enter the UK banking market the results of the Fiserv study will be equally comforting, with a clear majority of consumers willing to give the new banking entrants a try. Indeed, over a fifth of respondents (22%) say they have already switched away from their bank following an IT issue.

Fiserv recently partnered with Metro Bank and Atom Bank founder Anthony Thomson to develop a technology platform designed to help the raft of new challengers bidding to enter the UK banking market.

Yet, despite the digital love-in, over one-in-sx adults (17%) still visit their local high street branch at least once week and almost half (48%) of interviewees do this at least once a month. Surprisingly, nearly a quarter (24%) of respondents under 35 visit their branch on a weekly basis, compared to just 13% of those aged 55 or older.

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