According to a new banking report that was published recently, banks in the United Kingdom are worried of disruption from fintech startups. The MoneyLive banking report was compiled by LIVE and surveyed 600 top financial institutions in the country. Many see the startups as a significant threat to their business models.
The report sought to find out how traditional
financial institutions view the growing presence of services that are provided
by fintech startups in relation to their existing customer base and future
business prospects.
Customer
experience and service quality are two main factors that help acquire and
retain customers
Eighty-one percent of the respondents were of the opinion that superior customer experience and service quality mattered more than trust when it came to large financial institutions. The two factors were the biggest drivers of acquiring consumers and retaining them.
The problem is that 79 percent of the institutions
believe that fintech startups have more engaging brands. Also, 59 percent of
the respondents felt that customer-facing startups had the potential to replace
them entirely or at least pose a ‘significant threat’ to their relationship
with customers if they don’t substantially change their models soon.
An excerpt of the report read:h
Almost
six out of ten (59 per cent) of the bankers we surveyed perceive new intermediaries
to be a significant threat to their relationship with their customers…From
Amazon to Airbnb, Netflix to Uber, the story of digital disruption has not
ended well for those incumbents unable to match the personalised experience and
compelling cost savings of the newcomers.
Interestingly, 71 percent of the respondents agreed
that regarding brand messaging, many banks had not kept pace with consumer
priorities when it comes to speed, convenience and simplicity. Also, 31 percent
of those polled believed challenger banks would benefit the most from the
disruption. And 30 percent see fintech startups taking over from banks.
