Most U.K. Customers Would Not Choose a Digital Bank Over a Traditional One
Long before PSD2 arrived ( the European regulation that requires banks to open their platforms to fintechs), the U.K. had already established itself as a hub in Europe for digital banks like Revolut, Monzo etc. And indeed, these digital banks are growing in popularity, at least when it comes to people knowing they exist.
A report called “The Rise of Digital Only Banks,” released yesterday by MoneySuperMarket, found that 60% of the people in the U.K. knew about at least one such bank. Whether they would use it is another question.
According to the report, only one in 10 would use a “digital-only” bank over a “traditional” high street bank, but three out of four said they would use a digital only bank for a particular financial product. Additionally, two in five (37%) Brits said they do not trust a “digital only” bank with their financial data.
MoneySuperMarket defines a “digital-only” bank as one that focuses on a mobile app experience and doesn’t have any physical branches.
Of those digital-only banks, the survey found that the most well-known banks are Atom (19%), Monzo (10%), Loot (8%), Revolut (7%) and Starling (7%).
In the report, Sally Francis-Miles of MoneySuperMarket, said:
Switching banks in general is perceived to be a hassle, but digital-only banks face the added challenge of trust. New technology and data sharing are big concerns when it comes to finance, meaning consumers are still reluctant to open ‘digital only’ accounts unless they offer an incentive, stand-out product, or a level of convenience that they’re not getting from their traditional bank.
While this means traditional banks are still dominant for now, digital-only banks are constantly asking how they can make life easier for customers, what quirks they can add and how they can innovate their products and services to make banking more intuitive. We’re already seeing traditional banks such as HSBC1 and RBS2 stand up and take notice, attempting to replicate some of the successes of the digital-only banks with improved apps and new platforms to enable innovation. As this increases choice and competition, it can only be a good thing for consumers.
