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Survey Reveals UK Banks are Lagging Behind Demand for Instant Account Set Up

  • Survey of 2,005 UK consumers shows that 4 in 10 Brits (43 per cent) expect to be able to set up their bank account instantly
  • Despite the demand for instant access, under half of traditional (37 per cent) and challenger (40 per cent) banking customers report an instant set up
  • Challenger banks leading the way in an instant account set up but traditional banks are catching up 
  • Traditional banks own consumer market-share and challenger banks winning business customers and high earners
  • Research reveals current levels of customer satisfaction and keys to winning new customers: cash, interest rates and improvements to online experience

Today a nationwide study of British consumers reveals that UK banks are struggling to keep up with the demand for instant bank accounts.  The study of 2,005 UK adults, entitled ‘Rise of the Instant Bank,’ conducted by Censuswide and commissioned by Five Degrees, shows that challenger banks are leading the way in an instant bank account set up but traditional banks are catching up. 4 in 10 (40%) UK challenger banking users and over a third (37%) of traditional banking customers report an instant bank account set up.

The findings also uncover the preferred form of banking among consumer and business customers. 95 per cent of Brits report to use a traditional bank, and are more likely to take out a mortgage with their traditional bank (21 per cent) than a challenger bank (11 per cent).

Meanwhile, there is a growing customer base of challenger banking business customers and high earning individuals on an income of £75k+ a year.  1 in 5 (22%) customers are using challenger banks for business, compared to less than 1 in 10 (9%) of traditional banking customers, and over a quarter (28%) of higher earners of £75k+ income are using challenger banks. Challenger banking customers use cash management and currency trading (FX) the most frequently.

Current customer satisfaction among Brits is also examined by the report. Traditional banks risk losing customers due to service outages, more commonly reported than customers of challenger banks. The data shows that almost double the number of UK customers of traditional banks (38 per cent), experience disruption to their service on a yearly basis compared to challenger banking users (21 per cent).

The report outlines recommendations on how banks can win and retain customers. The findings uncover that financial incentives and higher interest rates are the key motivations behind why Brits switch banks.  Meanwhile, millennials and higher earners will switch banks for a better online experience and customer service.

Peter-Jan van de Venn, managing director and banking IT specialist, Five Degrees said: “Our research shows that the majority of traditional and challenger banks in the UK are currently lagging behind customer demand for an instant account set up, and risk missing an opportunity to attract new customers and retain existing ones.”

“With the rise of ‘big tech’ such as Google and Amazon, consumers are now used to fast, personal, safe and always-available portable solutions.  Banks must ensure that they take the same highly personalised and nimble approach as big tech, otherwise they will risk alienating existing and new customers with lengthily on-boarding processes.” 

“For banks to stay ahead of customer demands they must ensure they champion customer satisfaction across all channels, harnessing ‘Open Banking’ to increase efficiencies within account set up processes, and align with regulation effectively.”

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