A significant proportion of British residents (13%) are planning to transition to online-only banking services this year.
According to a recent survey, more than a third (33%) of UK banking customers believe that digital-only banks will soon become the norm, signalling a significant shift in the personal banking sector.
The survey, conducted by David Webber, managing director of Intelligent Environments, predicts digital-only banks will cause major disruption to traditional providers upon launch in the UK. One of the key reasons for this shift is the expectation that digital-only banks will offer superior online and mobile services. Almost a third (31%) of those surveyed believe digital-only banks would offer better mobile and digital banking services than traditional banks, while 16% believe they will have fewer security problems.
However, not everyone is ready to make the switch. More than half (52%) of UK banking customers don't like the idea of not being able to speak to someone in person if they have a problem. A significant proportion of the population still values in-branch services, according to Webber. As a result, 44% of those surveyed claimed that they wouldn't switch because in-branch services are important to them.
Despite these reservations, one in eight UK banking customers plan to switch to digital-only banks. Two providers set to launch digital-only banks in the UK are Atom and Starling. Virgin Money and Lloyds Banking Group are also playing leading roles in promoting digital inclusion and are likely involved in digital-only banking initiatives in the UK this year. While several banks are expanding digital banking, exact names planning new digital-only UK launches in 2025 are not explicitly listed in the search results.
The introduction of digital-only banks is expected to shake up the personal banking sector, according to Webber. Traditional providers have an opportunity to improve their digital and mobile services, as per Webber's statement. In fact, 60% of respondents said mobile and digital banking services are very important to them.
Some people have expressed concerns about not being able to speak to a customer service representative in person if they have a problem. However, with the growing importance of mobile and digital banking services, it is clear that traditional providers need to adapt to meet the changing needs of their customers. By focusing on providing a superior in-branch experience and improving their digital and mobile services, traditional providers can maintain their position in the market and continue to serve their customers effectively.
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