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U.K. consumers’ trust in their banks is at the highest level since 2012, but the decision of some banks to increase digital-only interactions risks alienating customers of all ages, according to new research by Accenture.

Accenture’s U.K. Financial Services report, which surveyed approximately 4,600 adults, found consumer trust in banks over the past two years jumped 11 percentage points to 40 percent — on par with the level of consumer trust of high-street retailers. At the same time, customer satisfaction with banks increased 5 percentage points to 70 percent — well ahead of the 57 percent satisfaction level in 2012.

This boost in trust and satisfaction coincides with a vast increase in digital banking services, as consumers make more frequent, but fleeting, banking transactions. But overall, U.K. consumers are physically interacting with banks much less.

For instance, the number of consumers who visit branches at least once a month has dropped from 52 percent to 32 percent, since 2015, while the number of consumers who use ATMs at least once a month has dropped 20 percentage points, to 62 percent — representing a 24 percent decline. Meanwhile, the percentage using mobile banking regularly has remained static at 34 percent. The number of consumers who transact with their bank by telephone at least once a month dropped from 16 percent to 9 percent, with millennials calling their bank more than any other age group.

Despite reduced bank branch visits, consumers still want human advisers for banking services. Seven in 10 consumers want the ability to raise a complaint with a human adviser, while almost two-thirds (63 percent) want to be able to open an account in person. Almost half (48 percent) want to be shown hands-on how to use the bank’s mobile and online services.

“The jump in consumer trust is good news for banks, showing improvements in digital services are working, said Peter Kirk, who leads Accenture’s Financial Services Distribution and Marketing practice in the U.K. “At the same time, the number of customers regularly visiting the branch is significantly reducing, but the number of customers regularly using mobile digital service remains static. This could be a concern for the banks as consumers still say they want to have the human touch. The next challenge is how banks provide convenient customer experiences that blend human and digital services to stop them becoming faceless and putting their newly earned trust at risk.”

Two-thirds (66 percent) of surveyed consumers said it was important a bank used personal data to provide advice relevant to their personal circumstances, with more than half (56 percent) saying they would find personalised offers based on their location to be useful.*

In fact, personalisation was the top cited factor for choosing a current bank account provider. Of the 14 percent of consumers who switched banking providers over the last year, more than a quarter did so due to lack of personalised services, with millennials more likely than any other age group to switch banks if services are not personalised.

In a move backing greater use of artificial intelligence (AI) to serve customers personally, 40 percent of surveyed consumers would support banks analysing their spending patterns to warn them if they could overspend that month. More than a quarter of Generation Zers and millennials (27 percent each) said they would use instant messenger to have a natural conversation with their bank.

Despite acknowledging the value of exchanging personal data for convenient banking services, only 5 percent of consumers believe that their personal financial data would be more secure with AI than with a human advisor. Additionally, 70 percent said they would not want to use social media channels to conduct banking activities or communicate with their bank on social media.

“Because consumers today expect banks to anticipate their needs and offer tailored services, the key will be offering the right balance of personalised, relevant offers and interactions, rather than impersonal transactions,” Kirk said. “Consumers want natural conversation with a bank that understands their needs and acts in their best interest, while keeping their data safe and secure. This is particularly significant given the data revolution expected with open banking in the U.K., which will challenge banks to compete on consumer experience. We know that customers have evolving attitudes towards the privacy of their personal data and the introduction of General Data Protection Regulation (GDPR) in May will add further fuel to the fire. Banks will be keenly aware of the need to let the customer retain control and to be careful not to cross the line from convenient to intrusive.”

by Alex Hamilton
Alex is Senior Reporter at IBS Intelligence, follow him on Twitter or contact him at: alexanderh@ibsintelligence.com
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