Digital banking risks customer relationships: report
Written by Peter Walker
UK consumers’ trust in their banks is at the highest level since 2012, but the decision of some banks to increase digital-only interactions risks alienating customers of all ages, according to new research by Accenture.
A survey of approximately 4,600 adults found consumer trust in banks over the past two years jumped 11 percentage points to 40 per cent – on par with the level of consumer trust of High Street retailers. At the same time, customer satisfaction with banks increased five percentage points to 70 per cent – well ahead of the 57 per cent satisfaction level in 2012.
This trend coincides with an increase in digital banking services, as consumers make more frequent, but fleeting, banking transactions. But Accenture noted that overall, UK consumers are physically interacting with banks much less.
For instance, the number of consumers who visit branches at least once a month has dropped from 52 to 32 per cent since 2015, while the number of consumers who use ATMs at least once a month has dropped 20 percentage points to 62 per cent – a 24 per cent decline.
The percentage using mobile banking regularly has remained static at 34 per cent, while the number of consumers who transact with their bank by telephone at least once a month dropped from 16 per cent to nine per cent, with Millennials calling their bank more than any other age group.
Despite reduced bank branch visits, consumers still want human advisers for banking services. Seven in 10 cited the ability to raise a complaint with a human adviser, while almost two-thirds wanted to be able to open an account in person.
“The jump in consumer trust is good news for banks, showing improvements in digital services are working,” said Peter Kirk, who leads Accenture’s UK financial services distribution and marketing practice.
“At the same time, 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.”
Two-thirds of respondents said it was important a bank used personal data to provide advice relevant to their circumstances, with 56 per cent saying they would like personalised offers based on their location. In fact, personalisation was the top cited factor for choosing a current bank account provider.
In a move backing greater use of artificial intelligence (AI), 40 per cent of surveyed consumers would support banks analysing their spending patterns to warn them if they could overspend that month.
However, only five per cent believed that their personal financial data would be more secure with AI than with a human advisor. Additionally, 70 per cent said they would not want to use social media channels to conduct banking activities or communicate with their bank on social media.
Kirk commented that 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.”
He added that customers have “evolving attitudes” towards the privacy of their personal data and the introduction of General Data Protection Regulation in May will add further fuel to the fire. “Banks will be keenly aware of the need to let the customer retain control and to be careful not to cross the line from convenient to intrusive.”