By : Jack Dougal
March 06, 2018 05:00 AM
One of the consequences of the recent wave of change and innovation in the banking industry is the emergence of digital-only providers, which place an emphasis on mobile and digital engagement over more traditional channels such as the branch.
Following the recent introduction of PSD2 and open banking in Europe and the UK, there is a strong chance this trend will continue and pick up pace.
However, a recent survey focusing on a number of global markets has indicated that the appeal of so-called ‘challenger banks’ – such as the UK-based app-only providers Starling and Monzo – could already be on the wane.
Market research firm RFi Group polled more than 1,000 consumers in each of the ten countries participating in its study and found that the proportion of respondents willing to try services from digital-only brands dropped from 74 percent in the first half of 2017 to 63 percent in the second half.
The share of people interested in having a digital-only business as their main bank declined from 50 percent to 44 percent.
This trend has been particularly notable in the UK, one of the most active markets for new banking start-ups. Just over half (54 percent) of UK respondents in the second half of last year were willing to bank with a digital-only brand such as Monzo, Starling or Atom, compared to more than three-quarters (78 percent) in the first half.
Charles Green, CEO of RFi Group, said: “According to the research, digital is a pull factor as opposed to a push factor for consumers when it comes to banking, with a positive customer experience driving increased engagement, yet a bad experience not in fact driving customers away.”
Encouragingly for traditional banks, the findings showed that they enjoy a high level of trust from consumers when it comes to maintaining the privacy and security of sensitive data
Resident news reporter
Jack Dougal is Banking.com's resident news reporter. He writes regular blogs covering the latest stories and key developments in the global financial services industry.
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