2021
9
UK Consumer Attitudes towards Digital Banking Market Report 2021
2021-11-29T03:01:39+00:00
OX1050533
2195
145639
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Report
en_GB
“Use of mobile banking is widespread, but it remains much lower than that of online banking, which has long been perceived as the superior digital channel. However, wider consumer trends…

UK Consumer Attitudes towards Digital Banking Market Report 2021

£ 2,195 (Excl.Tax)

Description

The UK Consumer Attitudes Towards Digital Banking report identifies consumer attitudes towards digital banking, the impact of branch closures, and awareness of open banking in the UK. This market report covers the market size, market forecast, market segmentation and industry trends for the Consumer Attitudes Towards Digital Banking market in the UK. 

Current Market Landscape

Despite the vast improvement in functionality over the last few years, many consumers think there is a clear difference between the digital services offered by the main banks. This implies that, in spite of high adoption levels, many consumers are unenthusiastic about making the most of mobile and online banking and are yet to explore its full potential.

  • Only 34% of banked adults think that there are clear differences between the digital services offered by the main banks.
  • 28% agree that digital-only banks are the most innovative providers.

COVID-19 has accelerated the long-term switch to digital banking, with lockdown forcing many people to use digital channels for the first time. A seamless experience during these difficult times should ensure a large proportion of new digital customers stick with these channels, at least to some extent, in the future.

Future Market Trends in Digital Banking 

However, new digital customers will be particularly vulnerable to existing and new risks, and banks must be supportive and proactive in helping the transition to digital go smoothly. This also involves addressing concerns relating to the ethical and social impact, for example on branch closures and job losses.

Although online banking is typically perceived as superior to mobile banking, changes in consumer behaviours regarding ownership and use of smartphones signal that the balance will soon shift towards app-based banking. Ensuring that mobile apps offer the same level of functionality as online banking could go a long way towards propelling this.

Read on to discover more details or take a look at all of our UK Finance market research.

Quickly understand

  • The impact of COVID-19 on digital banking, including use of digital devices for managing finances
  • Use of online and mobile banking
  • Reasons for not using digital banking, and interest in doing so in the future
  • Most important features of digital banking
  • Attitudes towards digital banking, including the impact on branch closures and views on innovations such as biometrics
  • Awareness of Open Banking and likelihood to use it, and how this has changed since 2018.

Covered in this report

Brands: Monzo, First Direct, Starling Bank, Metro Bank, Nationwide, Lloyds Bank, Barclays, Bank of Scotland, Halifax, NatWest, HSBC, The Co-Operative Bank, Santander, TSB, Virgin Money, Royal Bank of Scotland, Tesco, Atom Bank, Revolut, Zopa,

Expert analysis from a specialist in the field

This report, written by Irene Salazar, a leading analyst in the Financial sector, delivers in-depth commentary and analysis to highlight current trends and add expert context to the numbers.

Use of mobile banking is widespread, but it remains much lower than that of online banking, which has long been perceived as the superior digital channel. However, wider consumer trends are boosting ownership and use of smartphones and this will continue to influence this sector, particularly as the world reopens and mobile regains its ‘on-the-go’ advantages.
Irene Salazar - Financial Research AnalystIrene Salazar
Senior Financial Services Analyst

Table of Contents

  1. Overview

    • Key issues covered in this Report
    • COVID-19: Market context
    • Economic and other assumptions
    • Products covered in this Report
  2. Executive Summary

    • Impact of COVID-19 on digital banking
      • Figure 1: Short-, medium- and long-term impact of COVID-19 on digital banking, 2021
    • The market
    • Smartphones become the top method of accessing the internet
      • Figure 2: Methods of internet access, 2019 and 2021
    • Use of smartphones for everyday activities continues to increase
      • Figure 3: Smartphone activities, 2019 and 2021
    • Digital banks continue to top service league ranks
      • Figure 4: Personal banking service quality in Great Britain, July 2020-June 2021
    • FCA proposes a Consumer Duty, with digital markets being the focus of regulation
    • Companies and brands
    • Banks expand functionality in response to market developments …
    • … or as a perk of fee-paying accounts
    • Branches are key to support digital adoption
    • Digital brands struggle to widen perceptions beyond their niche areas of expertise
      • Figure 5: Key metrics for selected brands, 2021
    • The consumer
    • Use of mobile remains behind online banking, but is likely to continue growing
      • Figure 6: Use of online and mobile banking, 2021
    • Only a minority of non-users interested in trying digital banking
      • Figure 7: Interest in using online and mobile banking among non-users, 2021
    • Not seeing the need is the main barrier, closely followed by security concerns
      • Figure 8: Reasons for not using online and mobile banking, 2021
    • Convenience and practicality are the most sought-after features of digital banking
      • Figure 9: Important features in digital banking, 2021
    • Concerns about the social and ethical impact of digital banking
      • Figure 10: Important features in digital banking, 2021
    • Awareness of Open Banking remains low
      • Figure 11: Awareness of Open Banking, 2018 and 2021
    • Only one out of five are likely to use Open Banking
      • Figure 12: Likelihood of using Open Banking, 2018 and 2021
  3. Issues and Insights

    • Mobile could overtake online banking in near future …
    • … and leveraging tech to assuage security concerns could propel this
    • Addressing the social impact needs to be part of the switch to digital
  4. Market Drivers

    • Smartphones become the top method of accessing the internet …
      • Figure 13: Methods of internet access, 2019 and 2021
    • … and ownership continues to increase
      • Figure 14: Personal ownership of technology, 2019 and 2021
    • Use of computers for everyday activities remains fairly constant …
      • Figure 15: Activities conducted on tablets, laptops and desktops, 2019 and 2021
    • … but that of smartphones continues to increase
      • Figure 16: Smartphone activities, 2019 and 2021
  5. Market Environment

    • Digital banks continue to top service league ranks
      • Figure 17: Personal banking service quality in Great Britain, July 2020-June 2021
    • Current account providers mandated to share information by API …
    • … which could make it easier to compare and recommend products
  6. Regulatory and Legislative Changes

    • FCA proposes a new Consumer Duty
    • Digital platforms and markets likely to be regulated more closely
    • Contactless payments limit increases to £100 …
    • … making related digital banking functionality more useful
  7. Competitive Strategies and Innovation

    • Banks expand functionality in response to market developments …
    • Linked and connected debit cards for vulnerable customers:
    • Enhanced video banking and chat functions:
    • Personalised contactless payments limits:
    • … or as a perk of fee-paying accounts
    • HSBC’s branches are key to supporting digital adoption
    • US banking giants continue to shake up the digital space
    • Finding the right balance between app-only and digital-only
  8. Brand Research

    • Brand map
      • Figure 18: Attitudes towards and usage of selected brands, 2021
    • Key brand metrics
      • Figure 19: Key metrics for selected brands, 2021
    • Brand attitudes: First Direct is associated with great customer service
      • Figure 20: Attitudes, by brand, 2021
    • Brand personality: Monzo and Revolut are associated with being fun
      • Figure 21: Brand personality – macro image, 2021
    • Digital brands tend to be associated with positive attributes
      • Figure 22: Brand personality – micro image, 2021
    • Brand analysis
    • First Direct stands out in terms of trust, but is no longer at the forefront of digital banking
    • Monzo enjoys high levels of recommendation
    • Starling Bank has differentiated itself as a more grown-up digital bank
    • Revolut more likely to be associated with being fun
    • Atom Bank lacks awareness
    • Zopa affected by association with loans and credit
  9. Use of Online and Mobile Banking

    • Majority of banked adults use digital banking regularly
    • Online banking is enough for many …
    • … while others rely on mobile banking
      • Figure 23: Use of online and mobile banking, 2021
    • 23% use online banking but not mobile banking
      • Figure 24: Use of online and mobile banking – NET, 2021
  10. Interest in and Barriers to Using Digital Banking

    • Only a minority of non-users interested in trying digital banking
      • Figure 25: Interest in using online and mobile banking among non-users, 2021
    • Not seeing the need is the main reason for not using digital channels …
    • … but security concerns are a close second
      • Figure 26: Reasons for not using online and mobile banking, 2021
    • Technology as a solution not a barrier
    • Younger non-users more likely to cite a single barrier
      • Figure 27: Repertoire of reasons for not using online and mobile banking, 2021
  11. Important Features in Digital Banking

    • Convenience and practicality are the most sought-after features
    • Human touch over flexibility and accessibility …
    • … but 24/7 assistance could be a differentiator
      • Figure 28: Important features in digital banking, 2021
    • Mobile banking users more likely to value individual features
      • Figure 29: Important features in digital banking, by usage of digital banking, 2021
  12. Attitudes towards Digital Banking

    • Concerns about the social and ethical impact of digital banking
      • Figure 30: Important features in digital banking, 2021
    • Biometrics as a way to increase convenience, security and trust
      • Figure 31: Consumer attitudes towards digital banking – CHAID – Tree output, 2021
  13. Awareness of Open Banking

    • Awareness remains low …
      • Figure 32: Awareness of Open Banking, 2018 and 2021
    • Awareness is higher among 35-44s and those with higher incomes
      • Figure 33: Awareness of Open Banking, by age and household income, 2021
  14. Likelihood of Using Open Banking

    • Only one out of five are likely to use Open Banking
      • Figure 34: Likelihood of using Open Banking, 2018 and 2021
    • Likelihood of using Open Banking increases with awareness
      • Figure 35: Likelihood of using Open Banking, by awareness of Open Banking, 2018 and 2021
  15. Appendix – Data Sources, Abbreviations and Supporting Information

    • Abbreviations
    • Consumer research methodology
    • CHAID analysis methodology
      • Figure 36: Consumer attitudes towards digital banking – CHAID – Table output, 2021

About the report

This market report provides in-depth analysis and insight supported by a range of data. At the same time, introductory and top-level content is provided to give you an overview of the issues covered.

Market

Mintel provides a range of market information, frequently through the category level, including market size and forecasting, complete with market drivers that illustrate the forces that shape a category or market.

Consumer

Mintel’s proprietary consumer research provides our analysts with the attitudinal and behavioral data used to provide valuable insight to topical issues.

Brand/Company

Mintel provides overviews of the top brands and manufacturers, and uses consumer research to explore attitudes and reactions to brands, as well as insight into what will resonate with consumers.

Data

Market reports provide appendices of data to support the research and insight produced. Our databooks* are easily manipulated and downloadable to support your research needs and covers factors from consumer attitudes to market forecasts.

*databooks not available with UK B2B Industry reports.

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