Companies planning to launch banking services to challenge traditional banks in the UK should take heart from research that shows four out of five UK consumers would trust challenger banks with their money if they had the right IT infrastructure.
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Customers of traditional banks, such as RBS, finding themselves locked out of their accounts as a result of technology failures has increased consumer dislike for mainstream banks. Researchers polled 2,000 people in the UK for banking IT supplier Fiserv and found more than a quarter of consumers (26%) had experienced an IT issue with their bank. And of those, over a fifth (22%) have switched away from that bank as a result.
The research revealed that 81% would trust a bank if it had the right technology in place. Over half (56%) said a new bank would have an advantage over rivals if its IT was very reliable.
“A reliable IT infrastructure can increase trust and help improve customer satisfaction. When you have difficulty paying for your petrol because your card doesn’t work, you may start questioning the value of your banking relationship. Be it a new or established bank, neither can risk losing any of their customers due to something as avoidable as an IT issue,” said Travers Clarke-Walker, EMEA managing director of the International Group at Fiserv.
The rise of digital
“With the rise of online and mobile banking, it has become more important than ever for banks to have robust and reliable IT infrastructures that can withstand increasing demand and adapt to the changing needs of customers. The reality is that digital services are becoming increasingly important for consumers when it comes to their banking, and existing providers as well as new entrants must ensure a seamless experience across channels to remain competitive in the marketplace.”
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Large IT companies with state of the art IT at their heart are increasingly threatening banks in certain areas of their traditional business.
According to recent research from Infosys and French retail banking association EFMA, banks consider Google, Apple and Facebook their biggest competitive threat as technology firms offer consumers financial services. According to, 45% of banks rated the threat from technology companies as "high".
In a report titled Why Google Bank won’t happen, analyst firm Forrester said the high costs and strict regulation of setting up a traditional bank – alongside advertising revenue coming from banks – will push internet firms into roles that support the relationship between banks and their customers. These include transactional payment services, financial advice, money management and product comparisons.
It said new competitors will use their digital might to beat them at their own game. “But digital disruptors, such as Google, are disruptive because they don’t play by the rules," said Forrester analyst Oliwia Berdak.
"Instead, they use digital technologies to deliver better or entirely new ways of meeting customer needs, often bypassing regulation and redefining a given industry in the process."