By Steve Rackham, Senior Solutions Engineering Manager, EMEA Global Finance at NetApp

The way Financial Services operate is changing – and at breakneck speed. Spurred, at least in part, by the pandemic, digital interactions have surged and financial services institutions are now required to meet customers anywhere, anytime, on any device.

In tandem with this is the growing need for innovation. As AI and automation are revolutionising both banking and other financial verticals, so emerging technologies, with their stores of data, are seen as the means for traditional firms to keep up with their digital-native competitors. But while this is essential for the industry, are financial customers ready?

To shine a light on recent changes within the financial services sector, NetApp gathered insights from 800 consumers across the UK, Germany, France and Spain. I explored these findings specifically from the UK, to better understand customer response to online banking and innovation – and what this means for progress in the industry.

Convenience is the question but machines are not yet the answer

One of the research’s primary findings is that convenience is key for consumers. Overall, a vast majority (94%) of UK respondents still use traditional banking services. But the way people interact with traditional banks now spans a variety of channels, such as their website (82%), app (65%), physical branch (52%), telephone (36%) and online chat tools (36%).

But even with the online chat tools, they only prefer these when there is actually a human at the other end. The research found that only 8% actually prefer chatbots and a mere 5% of respondents say they’d choose to use robo-advisers. This anti-machine stance is only reinforced by the fact just 27% would like their banking services to feature automation and AI.

At the other end of the spectrum, 76% wish to keep interaction with real people for their banking services. So, why is this? Automation clearly brings untold benefits for financial services, but they’ll never be realised as long as consumers aren’t willing to embrace it. Ultimately, a bridge needs to be built between emerging technologies and customers, to clarify the benefits and reassure them about their security concerns.

Spotlight on security: protecting personal information at all costs

In today’s data-driven world, security is a cornerstone of any business and people expect their personal information to be protected at all costs. But while 80% of UK respondents believe their money is safe in their bank, only 66% feel the same about the personal data with their bank. Indeed a further 64% said they were afraid of their personal account data being stolen by criminals when using third-party providers.

Of course, this data is pivotal to innovation and success. A key to the problem is revealed, however, by the 53% of respondents who say they would start to use online banking or use it more often if they knew more about the safety of it. Both traditional and online banks seem to be lacking in their efforts to communicate and reassure consumers.

It is also this unknown that is hampering innovation in the sector. While only 27% of respondents said they would like banking services to be automated or involve AI, so a further 18% seemed to be sitting on the fence by responding that they did not know whether they would like banking services to be automated or involve AI, suggesting that they might be more willing if they were more aware of the benefits.

The banking battlefield: who will come out on top?

Digital disruption in financial services is not a new phenomenon. For many years, FinTechs have chipped away at the customer base of established players – as confirmed by the 35% of respondents who now use online banks, such as Monzo. But both traditional and digital offerings are wary of third-party players, such as Apple, in this space, as they    have easy access to customers and to infinite amounts of data.

The research showed that 57% regularly use third-party providers, with their success being their ability to reach customers by creative means and personalise services in a way traditional players simply can’t. Owing to the nature of traditional banking models, burdened with complex legacy systems and a legacy desire to be risk averse, this agility and ability to innovate is unlikely to ever reach the same heights as the competition, but they could at least be doing more.

This once again boils down to the need to educate consumers and build trust, in order to overcome barriers to innovation and unlock the yet untapped potential of data. Doing so will be essential to maintain a level playing field. But that’s not to say the road ahead won’t be without its bumps. So, how can this journey be made smoother?

Building trust is the key to data-driven innovation and elevated experiences

Ultimately, while the need for innovation in financial services is  not doubted, the first step to realising emerging technologies and propelling the sector forward is the continued delivery of convenience, to be able to meet customers anywhere, anytime, on any device.

In time, automation will aid this journey, but first a bridge must be built, to relay the benefits of emerging technologies, build trust and demonstrate that personal data is protected, at all cost.

And this requires a better approach to data management and protection, where institutions have complete control over data with simplicity, efficiency, flexibility – at the same time as ensuring security and compliance.