Digital banking increasingly popular, but almost half of UK customers still want face-to-face contact

26 September 2016

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  • 33% of customers say they don’t trust a bank without high street branches
  • Reliance on traditional banks for some products is waning in light of FinTech competition
  • Over a 1/3 of customers do not have a firm grasp of the financial products they need and don’t trust the advice they are given by their bank

Almost half (48%) of UK banking customers are still not comfortable managing their finances solely online or by mobile, according to the 2016 EY Global Consumer Banking Survey. Although digital banking is on the rise, with around a third of respondents claiming they use online and mobile banking more than they did a year ago, people still want to deal with someone face-to-face for certain banking queries[1]. In addition, a third (33%) claim to actively distrust a bank that has no high street presence, even if they predominantly use digital banking.

David Ebstein, EMEIA Head of Digital Financial Services, EY, comments: “It is important that banks move at a pace customers are comfortable with and allow them to choose how they want to interact with their bank. While they are right to encourage online and mobile banking, face-to-face communication clearly remains an important way to communicate for many people. In the same way that people at first were reluctant to replace their fax machine with email, this is simply a learning curve that banks must help their customers with.

“Although people are increasingly less reliant on branches, digital remains complementary, and not a complete replacement for human interaction.”

Banks struggle to be as flexible and customer-centric as new alternative providers

The survey found that the services and products offered by non-traditional banks[2] are increasingly being seen as competition to high street banks, which the survey suggests typically offer a slicker customer experience, and operate a model that people feel better understands their needs. Thirty-seven percent of banking customers claim to have used non-bank providers in the last year for both core banking products and other financial services products such as car loans and insurance products, and 23% of customers are considering using non-banks going forward.

Ebstein comments: “Banks should see this as an opportunity – they need to engage with FinTechs and where possible emulate the simple, online processes and features that people want if they don’t want to lose business. In a world where customers find it increasingly difficult to differentiate between the products offered by different banks, customer experience is a crucial differentiator. If banks get it right, customers will have no reason to walk.”

Trust in banks is reserved for safe-keeping of money

Almost half (48%) of UK banking customers trust that both their money and personal details are kept safe, and 41% trust that any fraudulent activity on their account will be protected by their bank. However, 80% of those surveyed worry they do not receive high quality unbiased advice from their bank, and 82% claimed they don’t trust that they are being told if there is a product which better suits their needs.

Ebstein comments: “Trust is the bread and butter of retail banking, so it is concerning that so many customers feel they cannot trust the advice they are given. We are increasingly seeing people take control of their finances and proactively manage their money, but this shouldn’t be in reaction to feeling that banks are unable to properly serve them.”

[1] Purchasing a new product or getting advice.

[2] Non-traditional banks are defined in this context as any firm offering financial services, which is not a traditional bank – notably FinTechs and supermarkets.