Neobanks have Not Yet Gained Trust of Most Consumers, but Monzo and Starling Lead in Service Quality: Survey

Although neo banks or digital banking platforms have been gaining significant market share during the past few years, consumers still appear to be somewhat hesitant when working with these new providers as their primary accounts, according to recent research by Accenture.

The 2020 Accenture Global Banking Consumer Survey, which obtained feedback from over 47,000 consumers from 28 different markets, revealed that there was an increase in neobank adoption (23% of survey respondents in 2020 maintaining a neobank account, compared to only 17% back in 2019). However, the number or percentage of people that actually use their neobanking accounts as their main account remains quite low at just 12%.

The research study noted that consumers’ overall interest in neobanking service providers is now fairly moderate, with customers claiming that these platforms offer more convenience, simplicity and potential cost savings. Notably, the survey respondents said they were most pleased or content with personalized offerings from neobanks (or their brands in general), instead of their “novel” features.

Of those customers who maintain a neobank account but who don’t use it for most of their transactions, the majority stated the main reason for that was that they were quite satisfied with their existing banking service provider.

With incumbents continuing to make enhancements while offering new types of digital services, Accenture predicts that the ongoing competition will only become more intense, especially in the digital banking industry.

It’s worth noting that UK-based customers were quite skeptical of neobanks, with just 10% saying that they have “a lot” of trust in these challengers. Meanwhile, 41% of Brits said they “trust” traditional banks, and around 45% predicting that neobanks will manage to survive the next 12 months.

Interestingly, a fifth or 20% of UK-based consumers said they don’t trust neobanks “at all” when it comes to looking after their financial interests or wellbeing.

However, a separate report suggests that challenger banks such as Monzo and Starling are providing quality services to UK-based clients. Both digital banks were ranked among the UK’s 19 largest personal account providers, according to recent research from UK regulatory authorities.

The UK Regulators Network had teamed up with the Financial Conduct Authority, the Office of Gas and Electricity Markets, the Office of Communications, the Water Services Regulation Authority and the Consumer Council for Water to release scorecards on the overall performance of regulated sectors in the country.

The main idea is that this may assist customers with selecting between good and poor performers, allowing them to see or evaluate how well they perform daily banking activities and related tasks.

Digital bank Monzo managed to top the chart with an impressive 86% approval rating, followed closely by UK’s Starling Bank and First Direct with a score of 84% and 83%, respectively.

High street bank Metro bank ranked fourth overall, and was followed by Barclays, Halifax, Santander, Lloyds Bank, Virgin Money, HSBC and NatWest (in that particular order). Tesco Bank came in last.

Banking challengers Monzo and Starling also ranked on the top of the list for offering the best online and mobile banking services (receiving a score of 89% and 88%, respectively).

When reviewing the number of complaints during H1 2020, the regulators discovered that Al Rayan Bank received the highest number of complaints with 12.72 complaints (on average for every 1,000 customer accounts). Al Rayan was followed closely by Cynergy Bank with an average of 12.4 complaints, and Barclays with 7.44.

Monzo reportedly ranked sixth on the list which tracks complaints regarding issues with bank accounts (with 5.75 complaints for every 1,000 customer accounts). Starling Bank notably did not make the complaints list.

Sponsored Links by DQ Promote


You may also like...

Send this to a friend