Banks failing to meet ‘instant account’ expectations

More than 40 per cent of banking customers expect to be able to access so-called ‘instant banking’ services as digital banking challengers drive changing consumer expectations.

A Censuswide survey of 2,005 consumers for digital banking firm Five Degrees showed that consumer satisfaction with account set up and onboarding was declining among traditional banking customers, with just 37 per cent reporting that their bank offers instant set up.

The burden of creaking technology is also taking its toll on traditional banks, with 38 per cent of customers saying they had experienced service outages - such as recent IT issues at Lloyds and TSB - compared to a figure of 21 per cent of digital challenger customers which have experienced disruption.

Meanwhile, the survey showed that challenger banks are winning out with business customers and high earning individuals (those on on an income of £75,000 or more year).

One in five (22 per cent) of customers are using challenger banks for business, compared to less than 1 in 10 of traditional banking customers, and over a quarter (28 per cent) of higher earners have signed up to challengers.

Challenger banking customers use cash management and currency trading features the most frequently, the study found.

Peter-Jan van de Venn, managing director and IT specialist at Five Degrees, said: “The majority of traditional and challenger banks in the UK are currently lagging behind customer demand for an instant account set up, and risk missing an opportunity to attract new customers and retain existing ones.”

He added that banks are facing obstacles to instant account access due to inefficient methods of paper processing and siloed data management, warning that financial institutions with legacy systems would struggle to compete with big tech giants such as Google and Amazon.

Jan van de Venn added that banks should take the same “highly personalised and nimble approach as big tech, otherwise they will risk alienating existing and new customers with lengthily on-boarding processes”.

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