Increasing demand for digitised financial services as banking customers switch focus

Research from IDnow reveals customers’ disgruntlement with time heavy procedures in traditional banking

Manchester and London, October 13 2022: New research from IDnow, a leading identity proofing platform provider, has revealed that 64% of Britons believe digital processes such as remote account opening, online banking options or an easy-to-use app were either extremely important or important when deciding who to bank with. This highlights an obvious demand for easy and more efficient banking processes. 

On the flipside, almost half (47%) of the 2,001 UK adult respondents were most annoyed by the time constraints involved with banking, including limited opening hours of local branches (22%), lengthy processes (16%) and having to visit a branch to open an account (9%). 

This presents a significant opportunity for both traditional and challenger banks to harness the current appetite in the UK for digital-led processes. 

Online safety concerns and ease of use remain in the minds of customers 

The research also revealed that more than half of those surveyed had opened a bank account online (53%) with the same percentage also stating they felt safe and secure to do so. However, that did leave 47% of respondents feeling it was unsafe, with more than a third (37%) citing digital bank fraud and cybercrime as the main reasons for this.

This highlights the need for banks, both traditional and challenger, to address the concerns of consumers when it comes to fraud, and ensure they have stringent onboarding processes that meet the highest security standards. 

Fintech versus traditional banking 

Despite continued growth in the fintech sector, only a quarter (24%) of respondents banked with a challenger bank, though in the London city region this figure rose to 32%. Meanwhile, 15% admitted to being concerned about making mistakes in the onboarding process and 13% had either cancelled or abandoned the process of opening a digital bank account, suggesting that banks need to make their onboarding process as smooth and frictionless as possible for their users. 

“The past two years have acted as a major catalyst in digital adoption across every sector, and this research illustrates how important digital processes continue to be for consumers,” said Mike Kiely, Sales Director for Financial Services from IDnow.

“It’s interesting to see that the majority of respondents still bank with a traditional bank. The demand for more digital processes remains high though, which presents a huge opportunity for those institutions equipped and prepared to embrace technologies that will enable them to provide the online services that many have come to expect,” he added. 

Adoption of digital varies by age

When delving deeper, those aged 55 or over are least likely to have opened a bank account digitally (37%) compared to nearly two thirds (63%) of 18-24-year-olds and 35-44-year-olds and 62% of 25-34-year-olds, showing a clear age gap in the adoption of digital services. Therefore, banks should provide freedom of choice for their customers, offering them the processes that fit them best. And while digital bank accounts are most popular with 18-24-year-olds, this age group is also the most likely to abandon or cancel opening a remote bank account (24%), suggesting higher expectations for the onboarding process from those most digitally savvy. 

Similarly, this young age group also feel the most unsafe when it comes to opening a bank account digitally, with only 41% saying ‘yes’ to feeling safe and secure compared to 60% of 35-44-year-olds. 

“The threat for young adults looks set to continue, unless businesses up their game and also educate people on the need to protect their own information,” explained Mike Kiely. 

“With young people spending so much of their time online, there are naturally more potential touchpoints for fraudsters to target. Meanwhile, older generations tend to be naturally less trusting of digital, so some fraudsters may see young adults as an easier target.

“Many young adults have a heightened awareness of the potential risks associated with digital activity. This is supported by the statistic which showed that cybercrime is their biggest worry (20%). 

“To overcome these concerns and capitalise on this growing market, it’s vital for banks to invest in the right technologies that will deliver the highest levels of security at every stage of the digital banking process while also addressing the demand of a smooth and simple user experience,” he concluded.  

Notes to editors

Survey commissioned by IDnow to establish current views on banking in the UK. The research was carried out online by Research Without Barriers (RWB). All surveys were conducted between 8th August – 11th August 2022. The sample size comprised 2,001 UK adults. 

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