Digital-only banks face big challenge to usurp traditional high street giants

Interesting excerpts from Digital-only banks face big challenge to usurp traditional high street giants (emphasis added):

“Only a small minority of consumers strongly agree that (online, digital) providers will offer better service, rates, or security than they receive from their existing banks, and well over half would prefer to avoid banks that lack a track record or do not have a high street presence.”

He added: “Consumers’ primary criteria when selecting banks include whether the organisations have an established reputation and conveniently located branches. This plays right into the hands of traditional banks and leaves the challengers at a disadvantage.”

To emphasise the importance of actual walk-in branches, the analysis revealed that although online is growing in significance as an acquisition channel, more than half of current accounts opened between 2013 and 2016 were arranged in-branch.

“Our research finds that, if anything, younger consumers are even more dependent upon branches for day-to-day banking than those in older age groups,” said Mr Fakhri.

“Given that these new entrants are targeting precisely this younger demographic, they will find it particularly difficult to gain significant numbers of customers.”

…Borrowers are sceptical about non-traditional lenders, with over half stating they do want to use lenders that lack established reputations and a minority agreeing that online lenders offer better rates or service.