In the increasingly fascinating neobanks versus incumbents battle, three-quarters of Brits are willing to choose a digital only bank. On the other hand, only one in ten would prefer to use a digital only bank over an incumbent bank. Douglas Blakey reports
Such are the findings of a survey conducted by price comparison website Money SuperMarket.
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The survey reports that:
- two-thirds of Brits are signed up with more than one bank for their financial products;
- one in five Brits are using as many as three banks;
- awareness of digital only challengers is on the rise with 60% of Brits knowing at least one, and
- nearly two in five (37%) do not trust a digital only bank with their financial data.
Neobanks versus Incumbents: Atom best known digital challenger?
Digital challengers that most Brits are aware of include Atom (19%), Monzo (10%), Loot (8%), Revolut (7%) and Starling (7%).
This finding is something of a surprise as Atom Bank does not offer a current account. The survey reports that Brits are twice as likely to experiment with current accounts compared to other products.
Over half of consumers consider a bank’s digital services to be a major factor when opening an account says MoneySuperMarket.
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By GlobalDataNotably, this rises to 71% of those aged between 25 and 34.
The neobanks are typically looking to grow customer numbers by perfecting one financial product before expanding their product range.
Sally Francis-Miles, money expert at MoneySuperMarket, comments: “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. This means that 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.
Neobanks versus Incumbents: traditional banks dominant for now
“This means traditional banks are still dominant for now. But digital-only banks are constantly asking how they can make life easier for customers.. We’re already seeing traditional banks such as HSBC and RBS stand up and take notice. They are 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.
Dr. Markos Zachariadis, Associate Professor of Information Systems & Management at Warwick Business School, adds: “In the digital age, the emphasis is on user experience, which is something these digital only banks are specialists in. Their ability to scale up their offerings at a much quicker pace than traditional banks, integrating external services and upping platforms in a modular style, means that they’re able to stay one step ahead.
“For Brits, it’s really a question of personal preference. Stick with the more product-orientated high street banks or enjoy the flexibility and innovation of the digital only banks.
For the full Money SuperMarket report: The Rise of Digital Only Banks the link is here
