Convenience, innovation and trust: the keys to unlocking future growth in financial services

For every country, community and industry, the future showed up early. COVID-19 has been a catalyst for the sudden surge in digital engagement – and our lives and livelihoods have been defined by consistent and uncertain change ever since.

The financial services industry has not been immune to this. But today, as the world charts a course beyond recovery and into growth, it seems clear that much of this change is here to stay – and financial institutions face an ongoing battle to keep up with digital-native competitors and ever-evolving consumer demands.

To shine a light on recent changes within the sector, NetApp gathered insights from 800 consumers across the UK, Germany, France and Spain. Below, I will explore the findings specifically from the UK, which help us better understand the public response to online banking, in-person services and what this means for progress in the industry.

Understanding the changing relationships consumers want with banks

Before diving into the crux of the findings, it’s important to note that traditional banks still have a significant role to play for consumers. In fact, 94% of respondents report using a traditional bank, with consumers saying they value having a good relationship with their bank, which is continuing to drive adoption in the UK.

For many, however, traditional banks are no longer the only service they use. Online banks, such as Monzo, account for 35% of consumers, while third-party services (such as Apply Pay and PayPal) are used by 56%. By no means is the old guard of banking about to disappear, but digital services are evidently on the rise – so what does this mean for the way customers interact with their banks?

Spurred at least in part by COVID-19, consumers have adapted to online-first methods. Judging by the 77% who would like to take care of most of their banking needs without having to visit a physical branch, it seems future relationships will continue to live online, with respondents preferring websites (82%) and apps (65%) to phone calls (36%).

That said, the human element will still be critical, as shown by the 76% who would like human advisors for banking services. Similarly, over half (52%) would still like the option to go into a physical branch. And while online chat tools are clearly rising in popularity, this is only when a real person is at the other end, with 36% preferring this option over chatbots (9%). This is reinforced further by the mere 27% who would like banking services to be automated or involve Artificial Intelligence (AI).

Consumers trust banks with their money but not their data

Trust is a cornerstone of any successful business – and nowhere more so than in finance, where banks and other institutions are trusted with one of the most prized possessions there is: money. The research commissioned by NetApp’s reaffirms this, with 80% of consumers reporting that they believe their money is safe with their bank.

But when it comes to their personal data, this figure drops to 66%, and a significant 64% are also afraid of their personal account data being stolen by criminals when using third-party providers. So why is this? Part and parcel of the problem is revealed by the 53% of respondents who say they would start to use on-line banking or use it more often if they knew more about the safety of online banking.

And this unknown is a prevailing problem for third-party providers too, as shown by the 40% of consumers who are reluctant to use third-party providers because they don’t know how they work. And it doesn’t stop at data security.

In a similar vein, it’s this unknown that seems to be hindering innovation in the sector. Above, I mentioned how just 27% of consumers would like banking services to be automated or involve AI. For the same question, however, 18% stated that they didn’t know – presenting the possibility that this figure would rise, should consumers be made more aware of its benefits.

Building trust today to drive innovation and growth tomorrow

Overall, this research paints an interesting picture – and what we’re seeing is that convenience is key. UK consumers want online banking and digital services at their fingertips, but they still want to be able to visit physical stores or access other in-person services when it comes to dealing with more financial decisions or answering important questions.

This suggests consumers don’t feel automated services such as chatbots or robo-advisors meet the level of service they require. For many, AI is still a relatively unknown entity and it’s clear there’s a need for education, in tandem with innovation, to build trust between customers and emerging financial services technologies.

It’s a similar story for security. Consumers aren’t entirely distrustful of traditional banks or third-party providers when it comes to the protection of their personal data. But there’s certainly more that could be done to put their minds at ease, and the prize of accelerated adoption – and of course, growth – if this could be addressed.

Ultimately, while the need for innovation in financial services is without doubt, the first step to realising emerging technologies and propelling the sector forward is the ability to meet customers anywhere, anytime, on any device.

But equally as important is the reassuring and educating of consumers, to build trust and demonstrate that their personal data is protected, at all costs. And this requires a better approach to data management and protection, where institutions have complete control over data with simplicity, efficiency, flexibility – while always ensuring security and compliance.