The UK’s digital challenger banks are significantly outperforming traditional banks when it comes to customer satisfaction, according to research conducted by FIS
Over 1000 Brits participated in the survey. The report revealed that challenger banks have increasingly better scores with satisfaction ratings, with 45% of their customers very satisfied, versus 30% of the top 50 global banks’ customers.
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The digital banks continued to outperform traditional banks on a number of metrics, including real-time payments, security and privacy. However, traditional banks are holding their ground when it comes to easy-to-use digital payment methods, scoring higher than their digital-first rivals. 94% of global banks’ customers agree that their traditional banks make digital payments easy, versus 89% of direct banks.
Mobile use soaring
Using mobile devices to conduct banking tasks is now considered the main channel for anyone under the age of 53. 74% of all contact with banks are digital, with millennials leading the way.
Overall, half (51%) of UK consumers reported using mobile banking apps more than they did a year ago. This significant increase is driven by young millennials, with 65% of them reporting using mobile banking apps more in the past year. Only 21% of millennials preferred using desktops or laptops for their banking needs. For baby boomers, and those older, desktops and laptops remain the preferred channel at 66%.
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The report also noted that digital challenger bank users are three times more likely to trust a technology company to provide a financial mobile app over their bank. Trust and control were ranked the most important aspect among consumers, giving both traditional and challenger banks the opportunity to expand their services.
Digital payments are most important to millennials, who are regular and passionate users of person-to-person (P2P) payments.
Overall, consumers trust both traditional and digital banks with their finances. However, this trust is more fragile as more consumers are turning against banking providers that have a security lapse. 13% of consumers who switched banks have experienced fraud.
Bruce Jennings, strategic development director at FIS, commented: “This year’s PACE findings show just how competitive the UK market has become. Consumers are demanding ever-more consistent and convenient banking experiences, and it’s the mobile interface – not physical locations or even personnel – that are now the face of a bank.
“This presents a clear advantage for the digital-first challenger banks that have entered the market in the wake of PSD2. For long-established banks, open banking provides an opportunity to leverage consumers’ favourable views of their security protocols and engage the right technology partners to add the ancillary products and services customers want. However, they must first complete the long-avoided digital transformation to ensure they can effectively serve today’s customers and maintain their market dominance.”
