UK Consumers Not Ready for Digital-Only Banking - eMarketer

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UK Consumers Not Ready for Digital-Only Banking

Survey finds physical branches still in demand

April 11, 2017

Since the start of 2017, UK retail banks including HSBC, Lloyds, NatWest and the Royal Bank of Scotland have announced plans to shutter what amounts to nearly 500 branches countrywide. Those moves are largely in response to declining use of physical bank branches, according to the companies involved. But a recent survey found few UK consumers were ready to bank exclusively via digital.

Primary Channel Used by US vs. UK Internet Users for Banking Transactions*, Dec 2016 (% of respondents)

Websites are already the go-to means by which many UK internet users conduct banking transactions such as paying bills, making deposits and transferring funds. According to a December 2016 survey conducted by The Harris Poll for Salesforce, 30% of adult UK internet users with bank accounts said a website was their primary channel for making banking transactions—the highest rate among any option.

That popularity coincides with widespread use of digital banking in the UK. A study by Eurostat found 68% of UK internet users ages 16 to 74 surveyed in Q2 2016 were digital banking users.

Likelihood that Internet Users in Great Britain Would Consider Using a Digital-Only* Bank, Jan 2017 (% of respondents)

Sentiment changes, however, when consumers are asked to consider the option of using a digital-only bank. A January 2017 survey of internet users in Great Britain by YouGov and PricewaterhouseCoopers (PwC) found only 9% of respondents already used a digital-only bank, and just 9% were either very likely (2%) or fairly likely (7%) to do so in the next three years.

The YouGov/PwC study found almost-two thirds of respondents were either not very likely or not at all likely to consider switching to a digital-only bank. So, despite online banking’s popularity, retail banks will need to balance consumer demand for digital services while maintaining some degree of physical presence for some time to come if they are to keep customers—even digitally-savvy ones—happy.

Cliff Annicelli

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