Will digital-only banks kill traditional players?
More than one in 10 Brits say they’ll be switching to a digital-only bank when these services becomes available, according to research from Intelligent Environments.
While 13% are eager to switch, the poll of 2,000 people also found that 52% don’t like the idea of not being able to speak to someone in person, with 44% saying they wouldn’t switch providers because in-branch services are important to them.
New banks, including Atom and Starling, promise digital-only banking services for the UK and are soon-to-launch, but are both yet to get licenses from the Prudential Regulation Authority and the Financial Conduct Authority.
David Webber, managing director of Intelligent Environments, which provides online and digital banking services, said: “Digital-only banks are in a strong position to cause major disruption to traditional providers when they launch in the UK later this year. Our research shows that people believe these new providers will offer superior online and mobile services. When taken together with the lower operating and efficiency costs naturally incurred by not having any branches, digital-only banks will be in a very competitive position indeed.
“However, digital-only banks do not spell the end for traditional branches. In-branch services are still highly valued by a significant proportion of the population, while others have voiced concerns about not being able to speak to a customer service representative in person if they had a problem. Traditional providers have a fantastic opportunity now to improve their digital and mobile services, and to focus on providing a superior in-branch experience for customers.
“Whether or not digital-only banks outstrip traditional providers within the next five years isn’t nearly as important as the benefits consumers will experience as a result of their introduction. More competition, more choice and an increased focus on mobile and banking services guarantee that digital-only banks entering the UK market will be a big win for consumers.”