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Majority of consumers think the neobanks will be dead in a year

Only 45% of UK consumers believe neobanks will survive another year

By Freya Pratty

Only 45% of UK consumers believe that neobanks will survive the next 12 months, according to new research from Accenture.

The startlingly high number shows the trust gap that still exists among many consumers for the new breed of challenger banks such as Starling, Monzo and Revolut. 

This comes despite the success of these companies in winning over millions of new users, particularly amongst the young. 

The figures, which come from polling 3,000 UK consumers between July and August, suggest an opportunity for existing lenders to fend off the threat of the challenger banks thanks to being viewed as more steady and secure.

“With such low confidence in neobanks’ long-term survival, it’s clear that customers are seeking greater stability and consistency from their existing financial services providers,” says Peter Kirk,  Accenture’s UK customer insight lead. 

The same numbers showed that only 10% of people would put “a lot of trust” in neobanks to look after their financial data. Only 20% of UK consumers polled would place no trust at all in fintech companies to look after their financial wellbeing.

“The challenge is on to create propositions that effectively reconcile the rapid and inevitable shift to digital in ways that feel more personal and relevant,” said Kirk.

The research also found lower trust in the traditional banking sector that the last time the survey was done two years ago. Only a third of consumers in the UK trust banks to look after their financial well being down from 44% last time round.

The results suggest that it’s the shift to digital communication that has eroded trust across the banking sector.. 

Whilst the number of people willing to speak to a human advisor via video call had increased significantly 46% compared to 12% before the pandemic only 29% said they would place complete trust in the advisor, compared to 52% who would trust an in person advisor completely. 

Covid-19 has dramatically accelerated the shift to digital at a pace banks could not have foreseen and this is threatening their relationships with customers,” says Kirk.

“It has also forced certain pockets of consumers, who primarily relied on face to face banking services, into the digital world. This has all had an unintended impact on consumer trust and the overall banking experience.”

 

Freya Pratty covers news at Sifted. She tweets from @FPratty

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