UK consumers are loyal to their banking institution, but say that effective technology is their biggest priority.
Highlighting the disruptive potential of digital banks, a survey by banking platform provider Modularbank found that over 90% of bank customers consider a strong technology offering to be important in deciding where to bank, versus 88% who cite interest rates. Both far exceed a bank’s brand, which 68% of consumers cite as being important.
“Incumbent financial institutions would need to worry less about challenger banks if their technology offering is prioritised above all else in their efforts to retain customer loyalty,” Modularbank says in its Seamless banking, seamless payments report.
“Technology really is the key to attracting and retaining a customer’s business in the banking world,” Vilve Vene, co-founder of Modularbank, told the Fintech Times.
Over the next few years, Vene sees banking becoming more embedded into our daily lives to the extent that certain processes are not seen as banking services.
She explained: “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 survey also showed the importance of fintech for everyday retail transactions, with over a third (37%) of consumers saying that they have abandoned an online purchase at checkout because their preferred digital payment option was not available.
And when it comes to services such as telecoms and utilities, fintech can help providers differentiate themselves and make customers’ lives easier.
“In 2020, consumer demand means that every company really is a fintech company – be it banks, retailers or the services industry. Recognising this and taking steps to leverage fintech to power your business is not just desirable, but a crucial step to take,” Modularbank’s report concludes.
Read our Next-generation connectivity report to learn more about how new technologies enabled by advanced connectivity will transform financial services and other key sectors.