By Ryan Weeks on 9th April 2018
More and more people know about digital banks but are not yet ready to fully commit to them, according to a new study by MoneySuperMarket.
Leading price comparison platform MoneySuperMarket has unveiled the findings of a new study into the rapidly growing digital banking sector. The headline findings reveal a tendency among consumers to utilise app-banks for specific, best-in-class products – but not for the full range of their banking needs.
The research, which encompassed 1,011 UK adults, shows that 60 per cent of Brits are familiar with at least one digital bank. Atom blew the competition out of the water among those surveyed, with 19 per cent aware of it. Next came Monzo (10 per cent), followed by Loot (8 per cent), Revolut (7 per cent) and Starling (7 per cent). This perhaps reflects the international appeal of Revolut, which recently announced that it had more than 1.5 million customers to its name.
But despite high levels of awareness, just one in ten people would prefer to use a digital bank over a traditional high street bank. In explaining this, MoneySuperMarket points to an additional finding: that 37 per cent of respondents do not trust neo-banks to allow them to share their data with other providers under the new Open Banking framework.
“Switching banks in general is perceived to be a hassle, but digital-only banks face the added challenge of trust,” said Sally Francis-Miles, money expert at MoneySuperMarket.
“New technology and data sharing are big concerns when it comes to finance, meaning consumers are still reluctant to open ‘digital only’ accounts unless they offer an incentive, stand-out product, or a level of convenience that they’re not getting from their traditional bank.”
The data show that roughly two-thirds of Brits are currently signed up with more than one bank for different financial services, with one in five signed up with as many as three. MoneySuperMarket sees this as indicative of a discerning market in which people are more willing to shop around for their financial needs.
Certain products stand out in the study as better suited to experimentation. Current accounts, arguably the mainstay of digital banking, are twice as likely as any other product to be given a test-run by customers. Credit cards and savings or ISA accounts are also high on the list of products that customer are willing to experiment with. Roughly half of respondents suggested they’d be likely to deposit savings with a digital bank.
“For Brits, it’s really a question of personal preference: stick with the more product-orientated high street banks or enjoy the flexibility and innovation of the digital only banks,” said Dr Markos Zachariadis, associate professor of information systems & management at Warwick Business School.