A quarter of UK consumers will have a Neobank account within five years
17 de Enero, 2019
Tiempo estimado de lectura: 3 minutos
The UK is home to a vibrant and burgeoning neobank ecosystem, with a number of these startups having secured banking licenses in the last few years
These neobanks, including Monzo and Revolut, are increasingly being adopted by British consumers, per a survey of 2,000 UK consumers from finder.com. Currently, 9% of Brits, equating to 4.5 million people, have opened an account with a digital-only bank, according to the study. By 2024, a further 16% of the population, or 8.5 million people, intend to do the same.
Here are some key findings from the survey:
– Unsurprisingly, age is the most significant demographic factor for neobank adoption. Adoption of these tech-savvy services is currently highest among Gen Z (15%) and millennials (12%). In the next five years, the adoption rate across Gen X, millennials, and Gen Z will be around 20%, compared with 9% and 2% for baby boomers and the silent generation, respectively.
– Convenience is the biggest driver of switching to a neobank, cited by 33% of respondents. Closely followed is getting better rates, which is cited by 31%, and ease of transferring money, selected by 28%. Although neobanks typically differentiate by offering personal finance management (PFM) tools, including insights and notifications on spending, this tied as the least cited reason for switching, at 22%.
– Consumers who didn’t wish to switch overwhelmingly cited how well their bank has treated them (61%) as their core reason for staying. Almost half (49%) cited the option to speak to a person as a reason for not switching to a digital-only provider, while getting better rates (17%) and the hassle of opening a new account (17%) were the least cited reasons.
– While the results suggest neobank disruption is in full force in the UK, there is hope for incumbents. Major neobanks in the UK have attracted huge levels of funding and significant consumer numbers — Monzo, which recently raised an £85 million ($108 million) Series E, has opened more than 1.2 million accounts. And more neobanks continue to enter the space — Viola Black rolled out its services this year, while Chetwood Financial received authorization. However, despite this traction, 53% of UK consumers have no intention of switching at all, and that most of these consumers feel well treated by their bank indicates that incumbents are coming from a position of strength. Those that undertake their own digital transformation efforts to offer customers the experience and convenience they desire can safeguard themselves against the threats posed by their tech-savvy competitors, limiting attrition and boosting engagement for the long haul.
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