Consumers Still Prefer In-Branch Banking
Research conducted by leading business and financial adviser Grant Thornton UK LLP has found that traditional ‘bricks and mortar’ banking outlets remain the preferred channel for product purchases. The survey finds that the majority (48%) of consumers rated branches as their preferred channel, followed closely by online platforms (40%). Despite the proliferation of smartphones and tablets, only 5% of respondents pointed to mobile banking applications as their channel of choice.
High Consumer Trust in UK Banks
The survey of over 1,500 UK respondents, also finds that consumers’ trust in banks remains relatively high, with 86% suggesting they trust their banks to rectify problems quickly and fairly and a majority (91%) of consumers reporting satisfaction or better with their banks.
Limited Interest in Switching Banks
The survey also identifies a lack of interest in switching between financial services providers. Only 13% of respondents suggested they were considering changing their bank; with the remaining majority (87%) content with their current providers.
In-Branch Banking Remaining Consumers’ Preferred Channel For Carrying Out Transactions
Regulatory Changes and Banking Habits
Despite new rules introduced to facilitate easier switching between financial services providers, Grant Thornton’s research suggests these have not played a major role in reshaping the retail banking market. Conducted approximately seven months after the UK’s Payment Council introduced the ‘seven day switching guarantee’, only 2% of survey respondents who had switched providers did so as a direct result of the switching guarantee.
Ewen Fleming, partner in Grant Thornton’s financial services group, commented: “What the research overwhelmingly shows is that demand for ‘traditional’ banking facilities remains high, despite many predicting the ‘digital revolution‘ would completely negate the relevance of bricks and mortar outlets. Consumers are still eager to carry out their banking needs in a face-to-face environment – particularly for milestone events such as taking out a mortgage or large loan. With many of the established high street banks now closing down their branches, and up-and-coming ‘challenger banks’ entirely avoiding having a physical presence, this could leave a significant gap between expectations and realities for consumers.”
Cash Transactions Stay Popular
Grant Thornton’s research also shows that cash transactions remain a dominant force in payments, with a significant majority (89%) preferring to make cash transactions for everyday items, over mobile payments.
Challenges Facing Mobile Wallet Adoption
Fleming continued: “The mobile wallet, though still in its infancy, has a long way to go in fully capturing consumers’ interest. The current infrastructure for mobile wallets remains a highly fragmented one, whereby a number of providers have tried to retain complete control of the customer journey, rather than integrating to accommodate for the broader set of payment-points which consumers are faced with daily. Although it hasn’t completely taken off yet, the conditions for a ‘game-changing’ mobile payments system to be introduced still exist; particularly if a mobile wallet comes to market which can serve as an aggregator between consumers’ accounts and payment options.
“The ongoing transformation of the UK retail banking sector, which started a few years ago with the financial crisis, explosion in smartphone adoption and more recent regulatory pressures, is having a profound impact on how financial institutions ensure they remain relevant and competitive.”
About the research
The survey was conducted by Grant Thornton UK LLP in March 2014 and represents the views of 1,500 UK consumers of banking products, aged 16 and over, with a broadly equal split between genders, income and age groups in the sample.
About us
Grant Thornton is one of the world’s leading organisations of independent assurance, tax and advisory firms. These firms help dynamic organisations unlock their potential for growth by providing meaningful, forward-thinking advice. Proactive teams, led by approachable partnersin these firms, use insights, experience and instinct to understand complex issues for privately owned, publicly listed and public sector clients and help them to find solutions. More than 35,000 Grant Thornton people, across over 100 countries, are focused on making a difference to clients, colleagues and the communities in which we live and work. The UK Grant Thornton member firm provides services to over 40,000 privately held businesses, public interest entities and individuals. It is led by more than 185 partners and employs more than 4,200 of the profession’s brightest minds.
Find out more at www.grant-thornton.co.uk
© 2014 Grant Thornton UK LLP. All rights reserved.
