App-only start-up banks see popularity fall among customers

15th Mar 2018

Business intelligence provider RFI Group’s recent survey reports that 54% of consumers would use a digital start-up bank at the end of 2017, down from 78% at the start of the year.

Monzo, Atom and Starling Bank are three app-only start-ups that have proved popular in recent years. Despite their popularity, their customer numbers are still minimal when compared with traditional banks. 

Global attitudes are in line with UK customers’ response to digital-only banks. Last year, global appetite for app-only banks fell from 50% to 44%. 

However, customers are not turning away from digital banking altogether. Worldwide, the proportion of consumers using digital banking rose from 58% to 68%. 

RFI Group’s survey of 1,000 UK customers shows that banks’ customers prefer digital options at existing banks rather than opting for start-up firms. 

In The Institute of Customer Service’s latest UK Customer Satisfaction Index (UKCSI), the banks and building societies sector scored an average of 79.8. This is above the UK’s all-sector average of 78.1.

Traditional banks would continue to benefit from doubling down on their efforts to provide excellent customer service, says Jo Causon, CEO of The Institute.

“We all know that we are in a challenging environment at the moment, and the crossroads of Brexit is drawing ever nearer. However, to adapt a famous saying, while all around you are losing their heads – it will be those that focus on the customer experience agenda that will be the winners,” she says.

She adds: “Businesses need to refocus and redouble their efforts to put customer satisfaction front and centre. After all, our research has shown that companies with higher customer satisfaction can reap an employee productivity gain of as much as 114%. While over an eight year period, those organisations with higher customer satisfaction in their sector have experienced nearly 10% higher profitability.” 

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