Traditional banks are at risk of being buried by new, innovative e-money providers if they fail to overhaul outdated fees and charges systems, according to new research.

Over half of the 2,000 respondents in the survey by Neopay reported frustrations with their high street bank, with a quarter saying they were most annoyed at banks for applying unfair charges – for sending money overseas, becoming overdrawn etc.

With a host of new e-money entrants into the market offering innovative products – often boasting lower charges for money transfers and more modern features such real-time transaction updates – high-street banks are now being warned they risk being left behind if they fail to innovate.

Indeed, a further 41% of respondents in the survey said that banks could provide a better customer experience by offering fairer and lower fees and charges.

Consumers also cited other advances, such as instantly updated account information (32%) and banks finding innovative ways to improve the banking experience (20%), as ways traditional banks could improve – leaving the market ripe with opportunities for e-money providers.

Commenting on the findings Scott Dawson, commercial director at Neopay, said: “Living in an increasingly digital world means that consumers have grown accustomed to services being delivered instantly, and at low – or no – costs. As a result, the charges and time scales inherent of the traditional banking system are becoming increasingly frustrating for consumers.

“There are now a whole host of e-money businesses entering the market in order to tackle these issues and create novel solutions that provide consumers much faster ways of accessing and exchanging funds. Innovative businesses such as international money transfer service and currency exchange business WeSwap have changed the way the market works by offering consumers the services they need, with much lower associated costs and charges. It’s likely that similar innovative businesses will continue to enter the market, looking for ways to challenge the traditional status quo.”

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