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UK banks that fail to deliver high-quality digital experiences face the risk of significant customer attrition, per a survey of 1,000 bank and building society customers conducted on behalf of Fiserv.
Business Insider Intelligence
Of the respondents, 86% said they would consider switching their account provider if they struggled to manage their accounts easily through digital channels.
Here’s what it means: Tech giants and fintechs have moved the needle when it comes to digital standards, and how banks respond is critical to their future.
- Eighty-two percent of consumers expect their financial service digital experiences to match or exceed that of tech giants. This demand for ease of use is almost identically high across every age group surveyed, with 78% of customers aged 55 or over — the lowest response — saying the same. Moreover, only 27% of respondents say they prefer to access financial services through branch visits, while 79% state they expect online methods to become more central in how they manage their financial health.
- Matching customers’ demand is vital for cross-selling. Almost two-thirds (62%) of respondents say they’d be likely to buy more financial services from providers they trust if it was easy to do so online. And 54% say they would be willing to use more services from their account providers if they could sign up for the offerings and manage them easily through online channels.
- Despite this desire for superior digital experiences, only 28% of respondents say they’re satisfied with the services provided by financial institutions (FIs). Almost half (45%) say that they’re unsatisfied with the online services of their current provider. With more fintech providers cropping up and making it easy for consumers to vote with their feet, banks would be wise to double down on their digital efforts if they want to avoid customer attrition.
- A significant source of friction for customers banking online is authentication and signing in. Forty-three percent of respondents say the’re unhappy with the user-friendliness of these processes. We’ve seen a number of fintech startups deliver secure and seamless methods for overcoming these challenges. Providers like Onfido, which secured a $50 million funding round last week, for instance, have developed solutions that can enable FIs to onboard customers seamlessly while meeting compliance needs. Partnering with players like Onfido can enable banks to overcome these sources of friction.
The bigger picture: Despite their digital transformation efforts, legacy providers still have work to do when it comes to providing seamless digital delivery.
Customers are increasingly placing a premium on the digital experiences they’re offered, and if incumbents continually fail to meet these demands, they’ll be jettisoned in favor of fintechs that do. Moreover, that digital demands cut across all age groups makes it especially imperative for banks to engage in a holistic approach to their digital delivery.
For those that get ahead of these demands, there are substantial opportunities to retain employees as well as acquire those customers who remain unsatisfied with their current providers. And with open banking, which has made switching service providers even easier, these opportunities and threats are made particularly more acute for incumbents.
Here’s an industry opinion, as told to Business Insider Intelligence:
"The customer experience bar has been set high with what consumers have come to expect from digital retailers and the neobanks. Removing friction points has been an area of focus — authentication being one of them. Banks have proceeded with sensible caution in the adoption of new technologies, balancing fraud risk with customer experience. Banks recognize the demand from customers for ‘on the go,’ personalized services, but must not forget the power of the human touch." — Tom Graham, Accenture FinTech Innovation Lab program director
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