We are in the era of multi-banking.
According to experience research and insights provider UserTesting, nine in ten Brits have accounts with two or more providers. This suggests growth, but the truth is actually quite different.
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Consumers are keeping these accounts open, even getting paid into them. But that’s where the transaction ends. They are spending elsewhere, borrowing from rivals, and taking financial advice from others. Financial lives are not restricted to one home, but spread across multiple providers, each better at meeting specific needs.
In this environment, “silent quitting” is the biggest threat to banks. Continued usage is too easily mistaken for a strong relationship. In reality, many banks are becoming little more than functional infrastructure.
Banks need new ways to compete that lie away from digital capabilities. From slick apps and intuitive platforms, all the way through to more mundane capabilities like cloud migration and fraud controls – all now come as standard. Functional banking experiences are increasingly interchangeable.
To stand out and retain consumer buy-in, banks need to compete differently. That means redoubling efforts when it comes to customer experiences, treating it as a strategic must, and not just a soft brand exercise.
So where should brands prioritise?
Clarity when it matters
Balancing human and digital touchpoints is vital. Knowing when to deploy each is what mitigates unnecessary friction and complexity.
Take First Direct. It consistently tops customer satisfaction surveys in UK retail banking, not because of product innovation, but because of how it communicates. Customers are never met with automated phone responses. Every call is answered by a human, around the clock.
This makes customers feel valued. They feel their issues are worthy of human attention, not deflected off to an automated answering machine. Also, First Direct’s employees are trained to hold genuine conversations instead of rushing to end calls – speed isn’t everything.
What makes this work most of all isn’t down to the human touch alone. First Direct wraps it in a digital experience that matches any challenger bank for slickness and intuition. The two reinforce each other.
In a market where capabilities are increasingly indistinguishable, First Direct offers a perfect counter by providing clarity when it matters – it’s a bank that has built loyalty almost entirely on how it makes customers feel when something goes wrong.
Building on your value proposition
Banks that are clear about who they serve and design their services around real customer needs will be better positioned to build trust and meet rising expectations.
From a commercial banking perspective, Handelsbanken is a market leader in this regard. Its entire model is built on decentralisation – the local branch is the bank. Local managers make credit decisions without referral to head office. There are no centralised sales targets. The proposition is explicit: we know your business, and the person you speak to has the authority to act. Retail banks can learn from this approach. Not only do consumers hold a plethora of options, they are also looking to consolidate how they manage their finances to avoid feeling overwhelmed.
Too often, banks have themselves to blame for silent quitting. In the race to showcase technological ambition and capabilities, they’ve lost sight of the more fundamental question: why should a customer bank with them at all?
Without a clear answer, they risk becoming just another app on a customer’s phone. Ignored, never to be clicked on again.
Simpler is better when it comes to technology
Customers are far less interested in digital tools than banks assume. The differentiator is not the tool itself, but the experience it enables.
Service design – the experience that results from a bank’s products and processes – should leverage technology to reduce the burden placed on both customers and employees. Too often, it has done the opposite, reinforcing broken processes at scale. TSB’s failed IT migration in 2018 locked millions of customers out of their accounts for months – a stark reminder of what happens when technology is deployed without sufficient focus on experience.
AI, automation, and cloud infrastructure will continue to underpin banking, but their value will come from simplifying operations and decision-making.
In retail, that means fewer steps and clearer journeys. In commercial and institutional banking, it means faster credit decisions, clearer accountability, and less repetition across onboarding, risk, and servicing.
Monzo is the benchmark when it comes to deploying technology the right way. The feature that built its early reputation wasn’t to do with payments or budgeting; it was the instant push notification when you spent money. Something so small, but it solved a genuine anxiety (did that transaction go through? was that me?) before the customer had to ask.
Technology is at its best when it goes unnoticed. In a competitive landscape, the value of technology like AI and automation will increasingly be judged on how reliably they improve real journeys rather than how innovative they appear.
The new rules of customer loyalty
The era of multi-banking has not made customer loyalty harder to see. It has made it easier to lose.
The banks that will succeed won’t necessarily be the most innovative. They will be the ones that are clearest about who they serve, most deliberate about when and how they show up, and disciplined enough to let technology take a back seat so the experience can come to the fore.
Customer experience isn’t a soft brand exercise. It’s the last remaining lever that technology can’t commoditise.
The banks that treat it as a strategic priority will earn the kind of loyalty that means they are not going to become invisible.
Nick Merritt, executive director, Designit
