Thursday, 15 October 2015
Do we need the digital-only bank?
Post-crisis a lot of people don’t trust banks. You can’t really blame them, it’s just the way things are now. That mistrust hasn’t stopped people using their banks, of course – where else would they keep their money? Apart from stuffing it into the mattress there isn’t much choice.
Never fear, those of you clamouring for a different way to do banking (raise your hands – anyone?), as a wave of digital-only banks have arrived to save the day.
In the UK, especially, the market has been inundated with new-age banks professing to be the cure to the ‘broken’ banking system. That cure apparently means that you never have to step into a branch again.
Fidor Bank, Atom Bank, Civilised Bank, Mondo, Monese and Lintel Bank (to name a few) have all emerged to offer UK consumers a different way to do banking. But do consumers want to bank differently? Squaring up to the giant retail banks is no easy task, especially as each can call upon near limitless resources to create solutions similar to those of a digital-only.
Granted, some of the banking start-ups have some novel ways to help people do their banking. Monese, for example, allows refugees and expats the chance to make transactions to and from foreign bank accounts, giving users much need funds as they try and set up a UK account.
I step into one of my bank’s branches maybe once or twice a year, if that. I almost entirely use its digital and internet offerings to do all of my transactions and payments. That doesn’t mean I will suddenly jump ship to a new bank because it offers me what it thinks is 'a better service'.
On that topic, mobile-only and digital-only banks lack the face-to-face service provided by retailers. Instead, customers will have to take all of their queries and issues through an online form (or, in some banks’ cases, a call centre).
In my experience, face-to-face troubleshooting is far more effective than trying to describe a problem over the internet to someone who has no indication of your mood. Call me old-fashioned, but I believe a majority of the public (even those in the younger generations) would prefer the feeling of security that comes with stepping into a brick-and-mortar building to make a complaint or raise an issue.
The emerging digital banks are making a good fight of it, though: many already have flourishing social media presences and pump out press releases like a well-oiled machine. They’re definitely here to stay (at least until their profits run dry) and are ready to make a lot of noise and shake their proverbial fists at the high-street giants.
Whether anyone will listen, though, is a different matter entirely.
Junior Reporter, IBS Intelligence