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Challenger vs. high street: which banks are more popular among consumers?

By Gaia Lamperti

June 28, 2022

  • Barclays
  • Challenger Banks
  • Digital Banking
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Today, it is undeniable that the banking world has seen irreversible change, with challenger banks hot on the heels of high street banks. By valuing data more, delivering tailored insights and creating products that consumers really want, these new financial brands are truly shaking things up.

The brands which are shaking things up are those who are getting closer to the data, delivering up-to-the-minute insights, closing the consumer closeness gap, and developing the banking products people truly want.

The latest report by consumer intelligence Talkwalker, set out to answer the question of whether consumers are truly in favour of these new challenger banks as opposed to the incumbent ones. The High Street vs Challenger Banks study distils twelve months of data to help understand the future of UK banking, using earned and shared media to take a look into the banking world of tomorrow.

According to the findings, high street banks lead the way with the lion’s share of voice in the sector. Barclays (34.4%) and HSBC (27.4%) are the most frequently mentioned in media, in part due to huge peaks and clusters in conversation around popular culture and sports such as football, with Barclays sponsoring the Premier League.

On the other hand, challenger banks such as Starling and Revolut are often mentioned too. Revolut sets itself apart as the brand being spoken about and engaged with the most with the highest market share of voice (8.9%) amongst the challenger brands. Themes here are far more customer-centric, talking less about the world in broad terms and more about payments, platforms, and plans.

Topic analysis identifies fraud, crime, and support as key conversation drivers; challenger banks are surrounded with far more operational conversations about the app, access, and their account.

However, while high street banks are spoken about more by consumers, they are not necessarily favoured. Challenger banks come out on top with more positive sentiment than high street banks. Starling Bank has the most favourable net sentiment score (-4.4%), whilst high street bank NatWest fairs the worst (-36.6%).

“The world is changing. Consumers are more demanding, more urgent, and more unpredictable than ever, and brands are struggling to keep up. By analysing up-to-the-minute insights and pulling data from a range of sources, brands are able to obtain a holistic view of the marketplace and identify opportunities to help them close the consumer closeness gap. This in turn helps them challenge or maintain their brand position,” said Jack Richards, Marketing Manager UK & Nordics at Talkwalker.

The biggest issue for both high street and challenger banks and the number one factor driving the decision for people to switch banks is customer service. Sustainability and ethics are also seen as the big drivers, but for positive reasons. HSBC can be seen advertising bank accounts for those people with no fixed address, and the climate-crisis-fighting initiative Tech Zero attracting the likes of Revolut, Starling Bank, and Monzo.

Whilst the likes of Monzo, Starling, Revolut, and Monese are experiencing growth, it’s worth noting that these challenger banks combined, are the same size as NatWest – the bank with 12.5 million customers and over 1.8 billion log-ins to the app every year.

“The rise of challenger banks is an example of some of the most successful innovation, diversification, and differentiation any industry as established as banking has ever seen,” Richards added.

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