Digital disruption ‘is yet to transform the banking sector’

The much hyped ‘digital disruption’ in the UK banking sector may be a much slower process than reports and commentators suggest, according to an online survey.

Conducted by market researcher YouGov and payment services group ACI Worldwide, the poll of more than 2,000 UK adults finds most account holders loyal to their banks, but ready to quickly adopt new services that are convenient and easy to use.

Eighty-eight per cent of UK current account holders do not plan to switch bank accounts within the next 12 months, 82% of consumers never use mobile payment services such as PayM or PingIT during an average month, while 59% never use mobile banking over the same period.

Additionally, 78% of those surveyed stated that it is unlikely they would use banking services offered by recognised alternative players such as Google, Apple or Facebook.

“The results appear to fly in the face of the popular ‘banking disruption theory’ and suggest that the majority of consumers are in fact loyal to their banks, that they don’t really like change and are staying put,” said Dean Wallace, global business lead, mobile payments, ACI Worldwide.

“This could be because e-services offered by most UK retail banks today are simply not compelling or different enough for the majority of customers to change bank account providers.”

However, the survey results also suggest that change is happening, albeit slowly than previously suggested, with 50% of respondents regularly using third-party payment providers such as PayPal at least once a month), thus moving away from using traditional ‘bank-endorsed’ methods of payments.

Seventy-six per cent of current account holders online use Internet banking at least once a month and 29% of UK consumers pay regularly via contactless cards, with Londoners leading the charge; 56% of respondents said they use contactless payment methods every month.

“The reality among many consumers is that they don’t really know what they want until it’s available or already in use by friends or family,” said Wallace. “The fact that nearly 90% of current account holders will stay put with their current bank should only be a mild solace for banking providers, as who knows what will happen in the next year or two.

“It is now that banks need to differentiate themselves from their competition and find ways to better attract and retain their customers. In terms of providing easily accessible and flexible services, banks need to focus on those opportunities that exist and grasp them quickly. The history of adoption shows that there is likely to be a ‘tipping point,’ especially for younger customers who will follow where their peers lead.”


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