Customers care more about strong tech than good interest rates when it comes to choosing a bank, according to new research.
Research conducted by new entrant to the UK fintech market, Modularbank, in partnership with market research specialists, OnePoll, has found that over 90% of UK consumers claim that a strong technology offering is important to them when choosing who to bank with. In fact, based on a survey of 2,000 UK consumers, this factor was cited more than any other as being an important factor in making this decision – more so even than interest rates, which 88% of consumers cited as being important in their decision.
Key findings include:
- Over 90 percent of UK consumers consider a strong technology offering to be one of the most important factors (over interest rates) when looking at who to bank with
- 53 percent of people say they would be happy if they never have to visit their branch to complete a transaction
Technology also beat out ‘brand of the bank’ and ‘personal in-branch relationships with banking staff’ when it comes to what is important to consumers in choosing where to bank, with only 68% and 47% of people respectively claiming that these attributes were important to them.
On a scale of 1-10 (with 1 being unimportant, and 10 being extremely important), 80% of consumers voted six or above when asked how important technology and a digital offering are in banking today. A further 53% claimed that they would be happy if they never had to visit their banking branch in-person again to complete a transaction.
Vilve Vene, co-founder and CEO of Modularbank comments: “Technology really is the key to attracting and retaining a customer’s business in the banking world. Interestingly, despite current perceptions that disruptive challenger banks have decreased loyalty to incumbent, traditional financial institutions, nearly 70% of UK consumers claimed to be loyal to their banking institution.
“With consumers prizing technology in banking above all else, however, what’s clear is that the key methods by which disrupter brands are able to test this loyalty is by providing a technology offering which makes for a more ‘seamless banking’ experience for the consumer. At Modularbank, we are committed to empowering every financial institution to be able to provide these services.”
Indeed, Estonian fintech company, Modularbank, which now offers its services in the UK, is in the business of providing platforms which allow any banking institution to integrate technology into its business. This allows financial institutions to improve ease and flexibility in the way that they serve their customers, providing them with a seamless banking experience which is more tailored to their individual needs.
A customer perceives banking as seamless when they are able to complete financial services without challenges or hurdles. 54% of UK consumers believe seamless banking is when they can complete transactions online without having to go to a branch, whilst 56% state that fast and efficient transactions constitute a seamless experience.
Financial technology is crucial today
“Financial institutions have historically ploughed a huge amount of resource into developing individual relationships with customers to build brand loyalty” explains Vilve Vene, “But with only 16 percent of customers claiming that visiting their bank in person is part of a seamless banking experience, these resources would be better diverted towards improving their digital offering and providing more tailored solutions powered by technology.”.
Prof. Dr. Philipp Sandner from the Frankfurt School of Finance & Management also says: "A bank is actually a 100% digital business model. The customer expects a state-of-the-art app and the integration of new technologies such as mobile payment or face recognition when opening the online banking. Of course, this must also be implemented with modern technologies and architectures. Established financial institutions have considerable problems keeping up with this dynamic. The time is increasingly ripe for focused, fully digital banks, which, especially as fintech companies, can act particularly quickly and without any ballast.”
Legacy technology systems used by financial institutions often lack agility and are not particularly nimble. As such, they do not allow for a strong digital or online offering, or the ability to provide more tailored services, such as variable interest rates based on personal circumstances. Modularbank’s technology platforms which can be seamlessly integrated into existing business infrastructures allow for such services to be offered easily.
The full report is available for download here: modularbank.co/report_uk
All statistics based on a survey commissioned by Modularbank in partnership with market research specialists, OnePoll, in February 2020. The survey garnered responses from 2,000 UK adult participants.