This month, Open Banking is rolling out and PSD2 is live at last. So our Project Media team, thanks to our Benefactor, Moorwand, commissioned the first in-depth survey on what over 2,000 UK consumers think about these changes in banking.
Here are the headlines:
1. High street banks should prepare for a rough ride
2. Women want control
3. Keeping customers in the dark is a risky strategy
4. When it comes to banking, the country is less divided than you might think
The co-founder of the Payments Association and my dear friend, Professor Dan Horne of Providence College, RI waved his magic data-wand over the mass of data and shared his findings with me, below.
1. Problems lie ahead for high street banks – the more affluent are ready to switch
The Payments Association Survey on Open Banking found that banks count on consumer complacency and high switching costs, but that more affluent customers are looking forward to a more innovative financial services environment.
It also found that the higher the income, the more likely UK consumers are to:
- Shop around and consider other options
- Support opening up financial markets to new players
- Consider switching to non-traditional service providers
In addition, those with above-average incomes view the presence of a physical high street bank as a less important factor than their less well-off counterparts.
2. Women want control of their financial future
Women want their banks to give them options or else they will leave for a non-traditional supplier of financial services. However, they are much less aware of the changes AND significantly less likely to shop around. The implication here is that they need better and more focused communication about how the changes can give them control.
As to drivers of change, women care more, in comparison to men, about:
- Data security
- Interest rates
- Customer service/support
3. Financial communications are missing the mark
Payments people obsess about Open Banking and GDPR. But only about half of consumers have any awareness of either of them. Those that are aware, however, are significantly more likely to be considering making changes in who provides them with products and services.
Those that have heard of Open Banking are generally positive about its benefits and:
- Want their current financial service providers to give them more options
- Are more likely to consider switching to a non-traditional supplier
However, there is also the risk of a backlash. People who had not been made aware had significantly more negative views of the banking community. Banks might like to hide behind the first finding. Maybe if they do not make customers aware of the benefits of these changes, their customers will not switch. But the second finding here suggests that those kept in the dark are the least positive about their banks. When made aware that they have options, they will readily jump ship. Customer ignorance is a risky strategy.
Surprisingly, there is not much difference between Londoners and people across the rest of the UK. Londoners are more likely to have heard of Open Banking but that is not really news. There are also no significant north-south differences or distinctions between England and the rest of the UK.
In the weeks ahead, we’ll be running press releases from our PR partner, Payments Association member SkyParlour, with comments from the Payments Association Advisory Board about what these findings mean for our industry. If you want to receive an overview of the findings at the end of March, just let Georgia know.
I look forward to seeing you at our annual conference, PAY360 on March 1st. If you’re an Payments Association Member and you have not yet registered for your complimentary places, just visit here to join the 350+ already coming.
Tony Craddock, Director General, The Payments Association