Brits unmoved by new digital challengers

Brits unmoved by new digital challengers

Brits may be the most prolific users of digital banking services across Europe, but only 14% would contemplate switching to an app-based challenger bank, according to a study conducted by Mastercard.

Research conducted among over 11,000 consumers across European markets, found that nine out of ten Brits now use online banking or banking apps, and 54% access them daily, far surpassing the reach of other countries.

Overall, six out of 10 Europeans welcome digital banking options and believe that the technology is making their lives easier and safer.

Nonetheless, only 14% of UK respondents said they would switch to a new digital bank, reinforcing the primacy of incumbents. Seven out of ten of the consumers surveyed plan to stay with their current bank or wouldn’t consider moving to a digital-only institution.

One of Mastercard’s biggest partners in mobile banking is app-based startup Monzo. Launched in October 2015 in the UK, Monzo now has 250,000 cardholders.

Tristan Thomas, head of marketing at Monzo, takes the results of the study with a pinch of salt: “We believe the future of finance is global and mobile. People want to be able to do everything instantly, anywhere in the world, with no hassle from their mobile. Bank branches are dying. Waiting on hold on the telephone to access your bank account is dying. Traditional banking is dying.”

Comments: (5)

Bo Harald
Bo Harald - Transmeri, Demos, Real Time Economy Program,MyData - Helsinki Region 10 July, 2017, 11:581 like 1 like

Very good. But can it really be necessary to for almost 50% of the population to log in every day? Novelty value - or mobile payments counted as e-banking logins? In any case a huge e-habit value worth to use also for login to public sector and other services needing strong e-id. Time for banks to create 4-corner network for e-id services..


Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune 10 July, 2017, 19:061 like 1 like

Per se 14% is not a small number. Just 5%* of US shoppers moved from brick-and-mortar stores to Amazon and see where Amazon is today. OTOH, it's not clear whether the switch from traditional banks to challenger banks is as much of a change as that from brick-and-mortar retail to ecommerce.

*: 8% of US retail sales happens online, of which Amazon has 3/5th share, so switch-to-Amazon % = 8%*3/5 = 4.8% = ~5%.

A Finextra member
A Finextra member 11 July, 2017, 08:45Be the first to give this comment the thumbs up 0 likes

WP: Actually, given that there is currently no digital bank in full production with a current account, I would say 14% is astronomical! This is one of those stories that will be used in five years to show how far we've come.  Would i switch today? No. Will I switch as soon as possible (but no earlier) - absolutely.

Jan-Olof Brunila
Jan-Olof Brunila - Swedbank - Stockholm 11 July, 2017, 13:381 like 1 like

Dear Bo, you are quite right, look at Sweden and the 4 box model Bank ID scheme: More than half of the population  use it on a daily basis for banking, gov services like NHS & tax reports, insurance matters, community services... making e services more accessible and secure. Yet most customers do not switch to a challenger bank, they may use an additional service from a challenger but rarely switch the current account even though almost all challenger banks in Sweden offer current accounts and debit cards today. Some of them have actually discontinued current accounts now due to poor uptake for a decade. Do not underestimate the force of brand loyalty and marketing. People tend to re-buy the same brand of sports sneakers, cars, blue jeans, washing detergents, supermarkets, ketchup, cereals, soft drinks, petrol stations... Lack of competition as the authorities say about banking?  If so there is a huge competition deficit in almost every sector of consumer goods/services. Or pleased enough customers?

Bo Harald
Bo Harald - Transmeri, Demos, Real Time Economy Program,MyData - Helsinki Region 12 July, 2017, 07:31Be the first to give this comment the thumbs up 0 likes

Tank you Jan-Olof! E-banking is indeed widely used for logging in to other services - like public sector and enterprises needing strong e-id - 85 million times last year in smaller Finland. Sweden should thus be som 150m times. Any figures available?