Only 20% of UK residents would opt for a challenger bank if they were opening a new account today, according to research from Equifax.
The survey – conducted with Gorkana – found that 44% of respondents would choose a traditional bank.
Reasons for choosing which brand to bank with included good customer service (41%), ease of managing money via an app or online (34%) and the availability of a physical branch (32%).
Of those who would opt for a challenger bank, 20% said better rates when using their card or withdrawing cash abroad would appeal to them, compared with 12% of people who would choose a traditional bank.
Some 27% of those who would choose a challenger bank valued more competitive rates on overdraft fees or loans when selecting such a bank, compared with 19% of those who would opt for traditional banks.
The research found that 60% of Brits hadn’t heard of any of the challenger banks listed in the survey, which included Monzo, Starling, Revolut and Monese among others.
Jake Ranson, banking and financial institution expert and CMO at Equifax Ltd, said: “Challenger and digital banks have been making their mark in the banking sector bringing attractive, consumer-friendly services to market, yet many consumers are still unaware of these brands.
“The government has taken action to increase competition in the sector, but there’s still a lot of work to do to encourage consumers to fully explore the options available to them and make informed decisions on selecting or retaining accounts.
“Open Banking is underway and is a huge advance for consumers.
“Services are coming to market that will help people get better value from banks, for example, identifying sign-up incentives or better rates tailored to their needs.
“The next step is for the industry to work together to increase consumer awareness of the value Open Banking unlocks.”
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