Banks potentially losing customers due to poor digital experience - 81% of adults say the quality of online experience determines who they bank with

81% of adults say the quality of online experience determines who they bank with, according to new research into post-pandemic digital banking trends in the UK.

A survey of 2,087 UK adults, commissioned by digital agency MagiClick and conducted by YouGov last month, showed notable differences in the importance of online experience between different age groups with 46% of those in the 55+ age group stating that it was “very important” compared to only 26% of 18-24 year olds.

The research also found that use of all digital banking services had grown since the start of the pandemic, with the largest increases being for use of mobile banking apps, with two-thirds (66%) of those who have used digital banking services more since the pandemic began stating they have used mobile banking apps more often. This growth in the use of mobile banking apps is led by the under 35’s, with 85% of 18-24 year olds and 79% of 25 to 34 year olds, using mobile banking apps more often. Use of mobile banking apps within the 55+ age group has also seen a significant increase (52%).

Use of online web banking also rose significantly, with half (50%) of those who have used digital banking services more since the pandemic began stating they have used online web banking more often. The highest rise in usage for online web banking was amongst the 55+ age group (60% using this service more often).

Despite the growth of mobile banking apps and online web banking, the use of both website chat facilities and automated chatbots only saw overall rises of 14% and 10% respectively.

Finally, the research also highlights the wider adoption of making payments via smartphones and smartwatches, with younger generations leading the way. Among those who have used digital banking services more since the pandemic began, 35% of 18-24 year olds increased their usage, followed by 32% of 25-34 year olds and 31% of 35-44 year olds. It’s clear though that the 55+ age group remain more reluctant to embrace making payments via smartphones and smartwatches, as only 16% of this age group increased their usage.

Mark Lusted, MagiClick UK CEO, said: “This research clearly shows that the events of the past 18 months have accelerated the adoption of digital banking services by consumers across all age ranges.

The quality and ease of use of the digital experience is clearly now of high importance to a large majority of users when choosing who to bank with and, interestingly, this was of highest importance to the over 55s. In an increasingly competitive landscape, with an array of new digital-only challenger banks entering the market, incumbent banks should take note.

The research also showed that the often-predicted demise of web-based banking services in favour of mobile banking apps has been overstated and that customers are choosing to use both facilities more, with little to separate them in terms of how much their usage has increased.

It also shows that banks are yet to fully realise the benefits and opportunities that website chat and automated chatbot facilities can provide to their overall service proposition, with those services seeing the smallest increases in usage during this period.”

The research was conducted by YouGov on behalf of MagiClick UK and is based on the responses of 2,087 UK adults between the dates of 18th and 19th August 2021.

Published: 21 September 2021