Almost 70 per cent of customers would be more comfortable using an Open Banking app provided by a traditional High Street bank over the same consolidated banking app provided by a challenger bank, a new study has found.

A survey of 2,000 UK banking customers commissioned by software analytics firm New Relic found that a majority would trust incumbent banks to combine their account information from multiple bank accounts in one mobile app, with 69 per cent saying they would be more willing to use consolidated banking services from traditional banks, compared to just 19 per cent who said they would prefer to use a challenger.

The findings come after NatWest became the latest High Street bank to launch its own in-app account aggregation service last week.

However, whilst there is growing consumer appetite for Open Banking services, the study showed that digital banking operations must be reliable in order to maintain customer loyalty.

The research found that 70 per cent would stop using any new banking apps if it was frequently down for repair, while 69 per cent said they would abandon the app if payments failed.

Overall, banking app availability was found to be a critical factor. When asked how often they would expect their mobile banking app to be down, only around a quarter (23 per cent) said they would tolerate planned or unplanned downtime more than once a month, while 26 per cent said it would be acceptable their banking app to be unavailable more than once every three months.

Other factors that would drive customers elsewhere included frequent error messages (66 per cent) and the offer of more in-app services or more up to date technology offered by another bank (12 per cent respectively).

Manesh Tailor, director of financial services solutions for New Relic, said: “Consolidated banking apps are attractive because they offer new business opportunities, especially with younger consumers.

“But any investment in new digital services can be wasted if the customer experience isn’t monitored continuously and used to inform the performance quality of the app – as the survey suggests, poorly performing apps can mean losing a customer permanently.”

However, Tailor warned that retaining younger customers would be an uphill battle for High Street banks in the coming years as other digital and big tech players such as Amazon and Facebook integrate financial services into their widely-used apps and social media services.

He explained: “While it may be surprising that traditional banks are still the preferred choice of customers for the mobile banking era, it shows the High Street giants they have a great opportunity and shouldn’t rest on their laurels. One in three consumers are still open to considering consolidated banking apps from market disruptors like Amazon or Google.”

Share Story: