High street banks beating new entrants for consumer trust

High street banks beating new entrants for consumer trust

Consumers still trust traditional high street banks more than alternatives such as supermarket banks, challenger banks or technology companies, according to research from MoneySuperMarket.

With technology companies beginning to enter the payments world with developments such as Apple Pay and Google Wallet, MoneySuperMarket asked 2000 consumers if they would trust a variety of traditional banks, supermarket banks and non-banking companies with their money.

However, despite the new entrants making headway, the big names of Barclays, NatWest and Santander all came out on top. More than a quarter (28%) of people scored these providers the highest, with a trust score of at least an eight out of ten. Amongst supermarket and online financial services companies, Marks and Spencer is viewed as the most trustworthy company, scoring at least seven out of ten with a fifth of all consumers, while Virgin Money followed closely behind with 21%.

At the other end of the scale, non-banking companies are the least favoured when it comes to consumer trust. Facebook scored a maximum of two out of ten in terms of trust from an overwhelming 61% of people, while two-fifths (40%) gave Google the same score. Only seven per cent would trust Facebook over a high street bank.

When asked if they would open a current account with a technology company such as Facebook, Amazon, Google or Apple, only one in ten said they would be likely to do so. This figure rises to a quarter of 18 to 34 year olds, but perhaps unsurprisingly drops to just three per cent of those aged 55 and over.

Kevin Mountford, head of banking at MoneySuperMarket said: “The traditional players still have the monopoly on the banking scene when it comes to consumer trust, with many people perhaps naturally cautious about the expertise and capability of new entrants. However, scandals such as mis-selling investigations and IT crashes evidently remain in the public’s mind, as both RBS and The Co-operative Bank came out as less trustworthy in comparison to the other banking giants.”

Comments: (3)

A Finextra member
A Finextra member 14 July, 2015, 09:07Be the first to give this comment the thumbs up 0 likes Really interesting to read this research. High street banks still do have a monopoly because realistically they are the only ones with a mature set of products. With the exception of Metro Bank, the challengers still have yet to grab ground on the big banks - although I'm sure it's coming. For trust, I'd replace security. An average customer won't push all their loan and savings into an unproven bank, even with the benefit of a well know brand. I'd foresee this as a journey, with the newer challengers offering perhaps digital loans or savings products and following up with current accounts and debit/credit cards once trust/security has been built. Starting with a limited product set would also allow the challengers to launch with reduced infrastructure, otherwise they could be swamped with operating cost in an attempt to ensure they too don't suffer IT issues.
A Finextra member
A Finextra member 14 July, 2015, 09:27Be the first to give this comment the thumbs up 0 likes Good read. The key piece here for me is difference between demographics. Today we have customer base that have lived through or been born into the fintech and new bank boom. Will older generations accept no branches? Will young customers ever know the community based branch manager? My personal opinion is that traditional banks will be strong for years to come, being ALMOST everything to everyone. The new players will carve out there own market and trust will grow.
Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune 14 July, 2015, 13:53Be the first to give this comment the thumbs up 0 likes

Glad to know that I'm not alone. I'd anyday pay my bank and have greater trust in my bank rather than a third party aggregator to remit the money to the biller in a bill pay transaction.  

HDFC Bank's PayZapp Ends My Bill Payment Woes

But nonbanks may have an advantage in that an average consumer might not be aware that monies loaded to third party wallets are uninsured.