Research conducted by leading business and financial adviser Grant Thornton UK LLP has found that traditional 'bricks and mortar' banking outlets remain the preferred channel for product purchases. The survey finds that the majority (48%) of consumers rated branches as their preferred channel, followed closely by online platforms (40%). Despite the proliferation of smartphones and tablets, only 5% of respondents pointed to mobile banking applications as their channel of choice.
The survey of over 1,500 UK respondents, also finds that consumers' trust in banks remains relatively high, with 86% suggesting they trust their banks to rectify problems quickly and fairly and a majority (91%) of consumers reporting satisfaction or better with their banks.
The survey also identifies a lack of interest in switching between financial services providers. Only 13% of respondents suggested they were considering changing their bank; with the remaining majority (87%) content with their current providers.
Despite new rules introduced to facilitate easier switching between financial services providers, Grant Thornton's research suggests these have not played a major role in reshaping the retail banking market. Conducted approximately seven months after the UK's Payment Council introduced the 'seven day switching guarantee', only 2% of survey respondents who had switched providers did so as a direct result of the switching guarantee.
Ewen Fleming, partner in Grant Thornton's financial services group, commented: "What the research overwhelmingly shows is that demand for 'traditional' banking facilities remains high, despite many predicting the 'digital revolution' would completely negate the relevance of bricks and mortar outlets. Consumers are still eager to carry out their banking needs in a face-to-face environment – particularly for milestone events such as taking out a mortgage or large loan. With many of the established high street banks now closing down their branches, and up-and-coming 'challenger banks' entirely avoiding having a physical presence, this could leave a significant gap between expectations and realities for consumers."
Grant Thornton's research also shows that cash transactions remain a dominant force in payments, with a significant majority (89%) preferring to make cash transactions for everyday items, over mobile payments.
Fleming continued: "The mobile wallet, though still in its infancy, has a long way to go in fully capturing consumers' interest. The current infrastructure for mobile wallets remains a highly fragmented one, whereby a number of providers have tried to retain complete control of the customer journey, rather than integrating to accommodate for the broader set of payment-points which consumers are faced with daily. Although it hasn't completely taken off yet, the conditions for a 'game-changing' mobile payments system to be introduced still exist; particularly if a mobile wallet comes to market which can serve as an aggregator between consumers' accounts and payment options.
"The ongoing transformation of the UK retail banking sector, which started a few years ago with the financial crisis, explosion in smartphone adoption and more recent regulatory pressures, is having a profound impact on how financial institutions ensure they remain relevant and competitive."