Brits flock to digital-only banks
08 December 2017 | 8658 views | 11
More than half of Brits either have, or are considering, switching to digital-only banks, drawn in by a better user experience and customer service, according to a survey commissioned by data management vendor Relay 42.
Of more than 2000 Brits quizzed, 27% have moved to an online or mobile-only bank already, while 26% are considering the switch.
More than half of these cite a better online experience and functionality, while 29% are drawn by attractive finance rates and fees and 28% by a better quality of service. Meanwhile, just 13% of respondents are not interested in exploring new technologies to help them manage their money.
Julius Abensur, industry head, finance, Relay42, says: "Customers are on the precipice of embracing future technology and new products, which means their existing banks need to keep pace with demands and innovation to ensure customer loyalty and competitiveness."
The survey results chime with a study from P.A.ID Strategies into digital account opening, which finds that challenger banks lead the way.
Marking UK banks on their digital registration, identity verification and account activation processes, the study finds that Staling Bank leads the way, followed by fellow challenger Monzo, with RBS and Barclays the best traditional lenders, and HSBC bottom of the pile. Overall, challenger banks score an average of 9.2 out of 15, compared to seven out of fifteen for high street players.
"We were surprised to see so few traditional banks had made progress towards a 100% digital experience through the mobile channel. Many failed to offer a fast, secure and digital account application and activation process, including verification of the applicant’s identity.
"This means the banks aren’t truly digital, degrading the user experience at first point of contact and increasing the chance of abandonment," says John Devlin, principal at P.A.ID Strategies.
Despite this, another report based on interviews with industry players in Emea finds that bank fears over the threat to their existence from the fintech wave appear to be receding.
While the scale of the challenge facing banks may actually have increased - the research shows an uptick in revenues perceived to be at risk from disruption by new entrants from 27% last year to 31% this year - stronger balance sheets and scale are giving banks renewed confidence in their ability to respond to the challenges of digital finance.
Simon Hardie, director, MagnaCarta Communications, says: "It’s a bit like turning a tanker, and the research provides evidence that enthusiasm for some of the earlier fintech hype is waning as banks focus on the task in hand. In comparison, fintechs are the speedboats - racing for scale and trying to catch up with their banking peers."