Are UK banks falling behind?
Mick Hegarty, managing director at Customer Insight and Innovation at GBG | 07:27 Wednesday 14th March 2018
In an era when companies such as Amazon, Apple and Facebook are setting ever higher standards for online customer experience, we've found that UK banks are failing to impress customers in the same way.
Our study 'Leaders in Financial Services Are Experts in Customer Identity' carried out by Forrester, compared the UK's adoption of technology to identify customers against that of the US, Australia, Singapore and China.
Of more than 300 firms across the five countries, the UK lagged behind in aspects of its approach to customer identity and this could be seriously harming its global competitiveness.
Life or death
We found that 84% of financial service firms in the UK are concerned about their ability to identify customers.
Ultimately, we believe they should be investing in new technologies that can speed up the identification process, such as facial recognition, automated data capture and social media data analysis, yet none of these are being widely adopted in the UK.
Both traditional banks and fintechs around the world are far outspending our firms on the digital customer experience.
This is a major issue underlined by the Forrester research, which stated that: "Financial service firms will live (or die) by delighting customers via digital channels."
Customers expect more
One thing we all know is that customer expectations are constantly rising. The likes of the iPhone X mean that many people use facial recognition every day, and this technology – along with automated electronic document capture – is familiar in every airport. In this digitally sophisticated world, it seems particularly clunky and outdated to have to visit a branch and produce a hard copy of an identity document before you can open an account, or to have to wait hours or even days for a decision to be made.
Prioritising cost control
So why are UK firms being so cautious? Perhaps because of the major regulatory changes this year – including Open Banking and GDPR – as well as planning for the implications of the ongoing Brexit negotiations. We know there are numerous competing priorities for UK financial service firms. Whatever the reason, our report shows that they are more focused on cost control than their global counterparts.
To thrive, though, UK financial service firms need to engage rather than enrage, and provide online customers with services that exceed their expectations. This means addressing the clear gap between their approach to adopting new technology and that of their global rivals.
A brighter future
Now for the good news. Although the UK is currently behind the rest of the world in its digital approach to customer identity, there are promising signs. Our research shows that UK fintechs are more interested than the established banks in adopting new approaches. Many are planning to increase investment in the next 12 months.
So, as we navigate a tricky year of legislation and policy change, these new challenger banks can play a vital role in helping the UK financial services sector to catch up with the rest of the world.
For more information on our report conducted with Forrester, visit www.idiq2018.com.
SIGN UP TO OUR NEWSLETTER TO RECEIVE MORE NEWS LIKE THIS STORY
Temenos partners with ClearBank for cloud payments
Banking software company Temenos has formed a strategic relationship with ClearBank to provide banks with a faster route to market for real-time cloud payments...
Unity Trust Bank registers 34% rise in profits
Unity Trust Bank increased profits by 34% in 2019...
Believe the hype – why explainable AI is a trend that’s here to stay
Technology has become a ubiquitous part of our day-to-day lives...
Piloting tech updates: ‘The bigger the bank, the harder it is to get anything done’
In the latest Medianett filmed roundtable session, we discussed how important technology is in the banking space, and what impact the industry expects it to have on its businesses in the future...
What banks need to know about cloud security
One of the most common perceived concerns when adopting the cloud is the issue of security...
OakNorth sees 95% increase in pre-tax profits
OakNorth Bank has announced a 95% rise in pre-tax profits in 2019 to £65.9m, up from the £33.9m recorded in 2018...
Redwood Bank signs up to Women in Finance Charter
Redwood Bank has announced that it has signed up to the Women in Finance (WIF) Charter...
Masthaven launches digital Women in Leadership programme
Masthaven Bank has launched a new Women in Leadership digital development programme for female senior leaders...
Protecting against supply chain disruption and the domino effect
Disappointingly, many UK SME business owners don’t understand their supply chains...
Confused about which Isa to choose? Hopefully this mini-guide will help…
We are now firmly in Isa season, so you’re likely to read multiple articles about the most competitive Isa products in the market and how best to make the most of your Isa allowance before the end of the tax year...
Garden shed entrepreneurs contribute £16.6bn to the UK economy
Entrepreneurs who run their businesses from garden sheds contribute £16.6bn annually to the UK economy, according to a recent study...