Mobile banking uptake at a standstill as consumers rethink bank relationships

If the latest consumer research from Accenture is to be believed, UK bank customers are utterly confused about how best to access financial products, spurning the branch while remaining unmoved by digital interactions.

3 comments

Mobile banking uptake at a standstill as consumers rethink bank relationships

Editorial

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The report - based on a survey of 4599 people - reveals that UK consumers banking behaviour has changed dramatically in the past two years, with physical banking visits plummeting by 20% while mobile banking uptake remains surprisingly flat. Furthermore, ATM usage is also on the decline with consumers who use them at least once a month dropping 20 percentage points.

Despite reduced bank branch visits, consumers apparently still crave human advisers for banking services. Seven in 10 consumers want the ability to raise a complaint with a human adviser, while almost two-thirds (63%) want to be able to open an account in person. Almost half (48%) want to be shown hands-on how to use the bank’s mobile and online services.

The results echo a recent survey from JD Power in the US, which found consumers increasingly ill-at-ease with the push for more digital interactions with their bank.

Peter Kirk, who leads Accenture’s Financial Services Distribution and Marketing practice in the UK comments: “The number of customers regularly visiting the branch is significantly reducing, but the number of customers regularly using mobile digital service remains static. This could be a concern for the banks as consumers still say they want to have the human touch. The next challenge is how banks provide convenient customer experiences that blend human and digital services to stop them becoming faceless and putting their newly earned trust at risk.”

Banks that can navigate their way around the revised Payments Services Directive and the push for Open APIs stand most to gain as two-thirds of surveyed consumers approve of the use of personal data to provide advice tailored to their particular circumstances.

In fact, personalisation was the top cited factor for choosing a current bank account provider. Of the 14% of consumers who switched banking providers over the last year, more than a quarter did so due to lack of personalised services.

“Because consumers today expect banks to anticipate their needs and offer tailored services, the key will be offering the right balance of personalised, relevant offers and interactions, rather than impersonal transactions,” Kirk says. “Consumers want natural conversation with a bank that understands their needs and acts in their best interest, while keeping their data safe and secure. This is particularly significant given the data revolution expected with open banking in the UK, which will challenge banks to compete on consumer experience"

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Comments: (3)

Ketharaman Swaminathan Founder and CEO at GTM360 Marketing Solutions

I don't think bank customers are confused.

It's banks and fintechs who are facing the consequences of their misplaced belief that people will spend as much time on banking as on other activities like news, shopping and entertainment. Compared to the other activities, banking is a chore. And, apart from Alexa Banking, all existing channels miss that point.

Bank customers will use just as much banking as they need to, which, IMO, is not much compared to other everyday activities. Just because there are 5-6 banking channels today compared to 2 channels back in the day doesn't mean the amount of banking activities will go up 3X. That's why we're seeing a stagnation of usage of all channels in developed markets like UK.

PS: The above is not true for developing markets. For reasons pointed out in my post Why Branch And Digital Channels Will Coexist Forever, banks are seeing an increase in usage volumes in all channels in India.

Ian Ogilvie International Senior Adviser at Ogilvie Advisory

Ketharaman,  I largely agree, especially that customers are not confusd.  I am not sure that the big banks expected this to unfold any differently;  it has tended to be the consultants and suppliers who have talked up the speed of change - as they would!  Much of what has happened in the past few years has been a switch of balance, trans enquiries and simple payments from PCs / laptops as well as from branches, ATMs and contact centres to mobile, with some incremental volume due to mobile's convenience.   The switch of higher value banking activities (e.g. bank account opening, mortgages) to mobile is a long, slow and steady haul but we should not be surprised by this especially when we look at the speed of channel switching by customers over the last 50 years as banks have added channels.  It is common for consultants and suppliers to talk up the gold rush to win business and then when it does not happen as they predicted, propose that they help their customers to understand what they should do now that it is evident that the gold rush is not as predicted.  And after that they spot the next gold rush.

Ketharaman Swaminathan Founder and CEO at GTM360 Marketing Solutions

@Ian Ogilvie:

True dat, LOL. I'm of course assuming that "present company excluded" clause is applicable when we talk of consultants and suppliers and gold rush advice providers:) That said, banks have a huge potential to attract net new mobile traffic for electronic stock trading. Ever since I signed up for eTrading in circa 2000, I haven't ever gone back to a human stockbroker. IMO, eTrading has arguably the strongest value proposition of all the digital offerings launched by banks during this period. But, perhaps due to inadequate focus or lack of marketing or whatever, it just hasn't reached its full potential in terms of consumer adoption.

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