Traditional banks trump online challengers in competition for digitally-savvy customers
Despite being enmeshed in a Banking Royal Commission and subject to a string of recent ASIC-enforced refunds, Australia’s big four banks may find some relief in the results of RGI Group’s most recent report which has revealed a customer shift away from digital-only challengers to traditional banking institutions.
The most recent Global Digital Banking Report, which surveyed over 1,000 Australian customers in addition to those from a host of other countries, showed that while digital banking is becoming increasingly popular across the globe, customers have recently been moving towards the online offerings of traditional banks over digital-only challengers.
According to the report, the rate of digital usage among customers grew from 58% in the first half of 2017 to 68% in the latter half of the year, while the “global appetite” for digital-only institutions dropped from 74% to 63% in the same period.
“The findings suggest that traditional banks which continue to ‘up their game’ in engaging consumers digitally will likely be the ones to benefit in the near future,” said CEO of RFi Group, Charles Green.
“Consumers are becoming more sophisticated when it comes to digital banking, their needs will continue to change and while this happens we are seeing them lean towards a model that provides channel choice which includes both the traditional, and more recent offerings.”
Old is gold when it comes to trust
One of the biggest revelations to come out of the report was the divide between traditional banks and digital-only players in their ability to securely manage customer data.
Customer trust levels in the traditional banks’ ability to keep personal information safe grew from 31% to 42% during 2017, while the same metric only increased slightly and actually decreased for new technology companies.
The same pattern emerged when it came to trust in the ability of institutions to keep customers’ money safe, with 49% of respondents trusting their bank to do the job compared with 27% who would put their trust in technology companies.
Demand for digital money management
While 28% of respondents still use pen and paper to manage their finances and 25% rely on spreadsheets, the report noted that digital money management tools (often built into banking apps) were becoming an increasingly appealing option across all demographics, and one of the best opportunities for banks to attract customers to their online platforms.
The finding backs up recent research from Roy Morgan which revealed just how important digital banking features, such as mobile apps, are for customer satisfaction.
The Roy Morgan study showed that 68.7% of respondents were likely to recommend a bank after using their mobile app - more than the 64.7% who would endorse a bank after visiting a branch and the 64.2% who would do so after using internet banking.
“The rapid increase in the proportion of bank customers using an App on a mobile phone or tablet is likely to result in a positive outcome for banks. The higher level of advocacy for this group, combined with their rapid growth, should result in improved satisfaction and advocacy levels,” said Roy Morgan’s Industry Communications Director, Norman Morris.
Whether you’re looking for a traditional bank, an online lender or just a killer banking app to keep track of all your finances, start your search today by comparing offers over at the Mozo bank account comparison hub.