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.
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.