MoneySuperMarket report shows the UK willing to take on ‘digital-only’ banking

Finance, Technology, UK News | Tue 1 May | Author – Business & Finance
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A MoneySuperMarket report has shown that three-quarters of British people would be willing to choose ‘digital-only’ banking as a financial product.

This may be so but only 10% would prefer to use a digital-only bank over a ‘traditional’ high-street bank.

Over a third (37%) do not trust these new bank rules enough to allow them share their financial data, suggesting more education is needed in the field by these innovators before people are completely convinced.

Under this report, ‘digital only’ comprises of a focus predominantly on a mobile app and having no physical branches. The companies that the UK public are most aware of are Atom (19%), Monzo (10%), Loot (8%), Revolut (7%) and Starling (7%).

Banking apps have added the capabilities of real-time spending notifications, 24/7 in-app support and the ability to instantly freeze/unfreeze a card. These are increasingly important features for the people of Britain. Since these new technological innovation shave taken shape, high-street banks have taken note and have really began to update their services as competition heats up.

Sally Francis-Miles, money expert at MoneySuperMarket, commented: “Switching banks in general is perceived to be a hassle, but digital-only banks face the added challenge of trust. 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.

Francis-Miles went on to say: “However, in a period of rapid digital growth in banking, one thing remains unchanged – it pays to consider all of your options. Whether you’re looking for a credit card, current account or mortgage, comparing deals and doing your research can save you money and ensure you’re getting the best product to suit your needs.”

Two-thirds of British people are signed up to more than one bank for their financial services and 20% use as many as three banks. Half of UK people said they’d likely deposit their savings into a digital-only bank.

Dr Markos Zachariadis, Associate Professor of Information Systems & Management at Warwick Business School, added: “In the digital age, the emphasis is on user experience, which is something these digital-only banks are specialists in. Their ability to scale up their offerings at a much quicker pace than traditional banks, integrating external services and upping platforms in a modular style, means that they’re able to stay one step ahead.

“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.”

The full report, The Rise of Digital Only Banks, can be viewed here.