Around one in eight UK citizens will switch to an account with a digital-only bank this year, according to new research.
Digital financial service software supplier Intelligent Environments (opens in new tab) conducted the study, which polled 2000 Britons online.
The firm also claims that one in three believe digital-only bank accounts will outnumber traditional ones within five years but more than half say they wouldn’t switch to an all-digital bank because they don’t like the idea of not being to speak with someone in person if they have a problem.
The news comes as several digital-only banking providers are set to launch into the UK market, including Atom and Starling.
“Digital-only banks are in a strong position to cause major disruption to traditional providers when they launch in the UK later this year,” claimed managing director at Intelligent Environments David Webber (opens in new tab).
“Our research shows that people believe these new providers will offer superior online and mobile services. When taken together with the lower operating and efficiency costs naturally incurred by not having any branches, digital-only banks will be in a very competitive position indeed,” he added.
The Intelligent Environments research suggests that many consumers feel confidence towards digital-only banks and 16 per cent even feel that digital-only banks will present less security problems than traditional counterparts.
Not Everyone Convinced
However, not all UK consumers have such strong faith in the digital-only approach to banking – over half of those surveyed don’t like the idea of not being able to speak to a person when a problem arises.
Another 44 per cent say that they wouldn’t switch because they find in-branch services important.
“Digital-only banks do not spell the end for traditional branches. As our research shows, many of the UK’s banking customers still like the personal touch. In-branch services are still highly valued by a significant proportion of the population, while others have voice concerns about not being able to speak to a customer service representative in person if they had a problem,” Webber claimed.
“If fact, traditional providers have a fantastic opportunity now to improve their digital and mobile services and to focus on providing a superior in-branch experience for customers.
“What is certain is that the introduction of digital-only banks will shake up the personal banking sector. Whether or not digital-only banks outstrip traditional providers within the next five years isn’t nearly as important as the benefits consumers will experience as a result of their introduction.
“More competition, more choice and an increased focus on mobile and banking services guarantee that digital-only banks entering the UK market will be a big win for consumers,” he added.