While digital challenger banks have made significant progress recently, the public’s trust in technology is a significant barrier to widespread adoption, according to Fujitsu.

The technology firm surveyed 8,574 consumers in the UK, Germany, Spain, the Nordics and the Republic of Ireland in August, finding that 40 per cent of the British public (2,041 consumers were based in the UK) do not trust challenger banks at all and 77 per cent admitted to only banking with a traditional bank.

In turn, this reserved attitude could halt technology adoption for financial services institutions which are faced with the fact that more than half (54 per cent) of the British public is worried technology will put their data at risk – with 49 per cent stating these concerns are a key reason they are not planning to adopt more digital banking services in the future.

Despite this, customers still prefer speed over security, with 26 per cent prioritising speedier transactions and transfers. This means that the speed at which challenger banks deliver services helps attract and retain customers, as a third stating they enjoy how quickly challengers provide them with information on their finances.

Access to reliable digital services is also a high priority for almost half (47 per cent) of consumers, however the ability to walk in to a bank branch is still important. In fact, two thirds of consumers are more likely to do business with a bank if it has a high street branch.

Over the next few years, the majority (63 per cent) of consumers expect technology to play a bigger role in how they pay for things, however the public still prefers the human touch, as 60 per cent would rather deal with a human when resolving issues with a bank.

Ketan Parekh, head of financial and insurance services at Fujitsu, said that challenger banks need to find a way to convince people that they are trustworthy enough to handle their monthly incomes and other major financial transactions. “What we are finding is that many customers still want the security of a physical branch, and although speed is important, human interaction has not yet been replaced by the convenience of technology,” he added.

The financial services landscape in the UK is also marked by a generational divide in attitudes towards digital banking, with half of 25 to 34 year-olds excited about mobile banking, compared with only 20 per cent of those over the age of 55. Despite this divide, the potential of technology to change the way people bank is an exciting prospect for over a third (37 per cent) of consumers.

Technology adoption has also the power to attract or deter customers from banking with certain organisations, according to the research. For instance, the public is more likely to bank with a provider which uses 5G (42 per cent) and near-field communication (44 per cent), while cryptocurrencies (30 per cent) and artificial intelligence (30 per cent) would make them less likely to open a bank account with the organisation.

The implementation of biometrics divided the public the most, as 46 per cent of customers said the technology would make them more likely to use a bank, while 24 per cent said it would make them less likely to.

Parekh concluded: “Ultimately, to innovate, both traditional and challenger banks need the blessing of the public, and this is what unites them – to be successful, traditional and challenger banks need to educate the public about the benefits of new technologies in financial services, and build a relationship based on trust.”

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