Appetite for digital banking among UK consumers has grown emphatically in the past year, according to the latest research from global financial services technology leader FIS™ (NYSE: FIS). Published today, the fifth annual “Performance Against Customer Expectations” (PACE) study, surveyed consumers on how well their banking providers are meeting their needs. It identifies an increasing gap in customer satisfaction in favour of direct banks compared to the more established global institutions.

A clear preference for direct and mobile banking

FIS’s 2019 survey shows that digital channels are now the most favoured way for people in the UK to check their bank balances, make payments and deposits, and interact with customer services, with mobile apps increasingly operating as the digital face of many banks.

Key findings include:

• 71% of all banking interactions are now digital or online, with the majority of these completed on a smartphone, tablet, or wearable device (47% vs. 41% in 2018). This compares to only 6% of interactions which happen in a branch
• 59% of banked UK consumers have used mobile apps to access financial services
• Demand for mobile banking is strongest among young millennials (18-27-year-olds), with 40% choosing a primary bank with a mobile banking app

The study also identifies areas of potential future concern for more established institutions as direct challenger banks and technology providers become increasingly trusted. For example:

• Almost nine out of ten (88%) direct bank customers say they are satisfied with them (+12% vs. 2018), compared to only seven out of ten (70%) who have a top 50 global bank as their primary provider (+1% vs. 2018)
• The proportion of millennials who trust banks more than technology companies to provide their financial mobile apps has fallen slightly since last year, with one in five (19%) of young millennials (18-27 years) trusting banks and technology companies equally (vs. 12% in 2018).

Commenting on the findings, Raja Gopalakrishnan, Executive Vice President of Banking & Payments at FIS said, “It’s now second nature for many consumers who expect instant and immediate banking access, to take advantage of user-friendly apps to manage their finances. Many banks of all types are doing a fantastic job when it comes to customer experience and consumers are experimenting and getting more familiar with what is on offer.

“However, as new products come onto the market following the launch of the UK’s open banking initiative last year, awareness of the benefits has increased, and the time for and complacency among the big established banks is over. It’s particularly crucial that mobile is recognised as the most important part of banks’ customer-facing offering, to drive engagement with consumers of all ages through a secure and frictionless experience.”

Additional findings from the FIS survey include:

• More than a third (35%) of consumers want banks to invest in apps in order to replace plastic payment cards in the coming decade
• In addition, almost half (47%) want banks to invest in digital security technologies like facial recognition, instead of passwords
• However, the growing use of direct and digital banking is still no substitute for human interaction, as 85% of people prefer not to talk to a robot when banking and only 15% say they want banking providers to invest in voice-banking services powered by artificial intelligence.