UK consumers put strong technology as main appeal for banks

https://thefintechtimes.com/uk-consumers-put-strong-technology-as-main-appeal-for-banks/?utm_source=rss&utm_medium=rss&utm_campaign=uk-consumers-put-strong-technology-as-main-appeal-for-banks
http://thefintechtimes.com/wp-content/uploads/2020/04/0-7-1.jpeg?#
UK consumers are placing strong technology as their
biggest priority for banking, but digital banks need to be clear
with their value offering to capitalise on this, according to Vilve
Vene, CEO and co-founder of core banking platform
Modularbank

In new research on the UK’s financial space, the FinTech
platform found that more than 90% of UK consumers claim a strong
technology offering is important to them when choosing who to bank
with. The survey, which comprised of responses from 2,000 UK
consumers, stated the technology was more important than interest
rates, with only 88% of respondents citing it as an important
factor.
The reason for this desire for robust technology comes from
the fact technology is being deeply ingrained in our daily lives.
“As consumers we are receptive to these advances which continue
to enhance our working and personal lives,” said
Vene
. “Let’s take the example of the growth of
neobanks. These 100 percent-digital banks have grown in popularity
because banking is an everyday essential for people and they
recognise the value of having a strong banking technology offering
which caters for their needs.”

The coronavirus has increased the demand of online banking
services, as people are being told to stay indoors, keeping them
from visiting their branches.  With the UK’s Chancellor of the
Exchequer,  Rishi Sunak, giving people a three-month holiday on
their mortgages people have been spending hours on the phone trying
to contact their bank, simply because many traditional financial
institutions have no other means of communicating with
customers, Vene stated.

However, there is banking technology available which would
enable consumers to apply for changes with a single click and for
banks to handle them internally just as easily, she stated.

With the current situation, digital banks are in a great place
to acquire more customers. People are clearly looking for strong
technology-based solutions and lengthy phone calls trying to
contact their bank in this time could see them look towards a neo
bank. However, Vene believes they need to really consider what
their actual value offering means in terms of service as many
offerings in the market at the moment are very similar.

“What is crucial for these banks now is to differentiate
themselves by introducing more complex, new services that are easy
to use and which add real value to customers. Only by doing this
can these neobanks become a true banking partner for their
customers (currently they may have significant numbers of
customers, but these customers only use a fraction of the available
services in their everyday banking).”

If challenger banks do not act fast, they will miss the
opportunity. Customers are typically loyal and if incumbents do act
quickly and implement strong technology, Vene believes they would
likely retain their customers.

In Modularbank’s
report
it also found that consumers are no longer worried about
the brand of a bank or creating personal in-branch relationships
with staff. Only 68% of people cared about the brand and 47% of
people want to have a personal relationship in-branch.

On a scale of 1-10 (with one being unimportant and 10 being
extremely) 80% of consumers voted six or above when asked how
important technology and a digital offering is in banking.
Furthermore, 53% claimed they would be happy if they never had to
visit their bank’s branch again.

People are becoming more opening to non-branded banks. Brands
are not important, instead financial institution need to gain the
trust of the consumer that their savings and operations are safe
and secure.

“The need for physical branches becomes totally obsolete since
the banking services they provide can be done more conveniently and
efficiently online. This does not mean that there will not be a
client manager in banks anymore, this just means that the
operations that actually do not need human contact will take place
without it,” Vene added.

“I personally have run several companies and handled all my
personal banking over the past ten years without visiting my bank
branch even once, however, I still feel that I have a personal
relationship with them and my worries are all handled with
dedication.”

Estonia-based Modularbank offers financial institutions with
technology which can integrate with existing systems and offer
seamless digital banking experiences. Vene said, “Technology
really is the key to attracting and retaining a customer’s
business in the banking world.”

While Vene does not believe banking will be fully digital within
five years, she does see everything shifting that way. Furthermore,
banking will become more embedded into our daily lives to the point
where it could become “invisible” in the extent that people
will not consider certain processes as banking services. She said,
“This is in fact already a reality, in the form of ‘buy now,
pay later’ products already offered by many retailers. To the
consumer, these are retail services, yet they are still financed by
banks. In the future, more and more retailers will be offering
services to help finance purchases – and these will be set up and
run entirely via technology.”

The post
UK consumers put strong technology as main appeal for banks

appeared first on The
Fintech Times
.

https://thefintechtimes.com/uk-consumers-put-strong-technology-as-main-appeal-for-banks/?utm_source=rss&utm_medium=rss&utm_campaign=uk-consumers-put-strong-technology-as-main-appeal-for-banks