People still trust brick-and-mortar branches more than digital banks
Digital banking has surged in popularity over the last few years, but research out today also shows many still won't trust a lender without a brick-and-mortar presence.
Just less than half (48 per cent) of UK banking customers would not be comfortable sorting out their finances solely online or by mobile, while a third (33 per cent) still don't trust a bank without branches on the high street, according to EY's Global Consumer Banking Survey.
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"It is important that banks move at a pace customers are comfortable with and allow them to choose how they want to interact with their bank," said David Ebstein, Europe, Middle East, India & Africa head of digital financial services at EY. "While they are right to encourage online and mobile banking, face-to-face communication clearly remains an important way to communicate for many people.
"In the same way that people at first were reluctant to replace their fax machine with email, this is simply a learning curve that banks must help their customers with.
"Although people are increasingly less reliant on branches, digital remains complementary, and not a complete replacement for human interaction."
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Despite the scepticism, digital banking is becoming more commonplace, with around a third of those responding to the survey stating they now use online and mobile banking more than they did a year ago.
The survey found consumer mistrust spreads to banks more generally as well, regardless of how well-established they are. Four out of five (80 per cent) of those questioned were concerned they might not be receiving good quality, unbiased advice from their bank, while 82 per cent did not trust their bank to tell them if there was a better product which suited their needs.
"Trust is the bread and butter of retail banking, so it is concerning that so many customers feel they cannot trust the advice they are given," Ebstein said. "We are increasingly seeing people take control of their finances and proactively manage their money, but this shouldn’t be in reaction to feeling that banks are unable to properly serve them."
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Meanwhile, around a third (37 per cent) said they had used somebody other than a bank for products which they would traditionally turn to a bank for.
"Banks should see this as an opportunity – they need to engage with fintechs and where possible emulate the simple, online processes and features that people want if they don’t want to lose business," said Ebstein.